Jobs, Jobs, and Quality Jobs
By Don Holecek, Editor-in-Chief of Michigan Tourism Business, and Director of the Travel, Tourism and Recreation Resource Center at Michigan State University
The tourism industry has come a long way along the road to gaining respect in economic development circles. For example, in a recent article in the New York Times (03/10/05) titled, “The Fed Says All Is Well or Mostly So,” the tourism sector was highlighted on an accompanying graphic summarizing economic activity in three of the twelve federal Reserve Bank Districts. The article is based upon the Fed’s recently released “Beige Book” report, in which results from the tracking of regional economic activity are reported. The reports are closely monitored across the investment and banking community. Until recently, tourism was rarely mentioned in “Beige Book” reports, even in the “fine print.” Today, it has earned front page mention, along with manufacturing, retail, and other industries dominant in regional economies. Tourism is also commonly listed among the world’s leading industries, often as the world’s largest industry and employer. It is also frequently noted as being among the top two-to-three industries in state economies, including Michigan’s. Yet, tourism often fails to garner positive attention within economic circles when the issue of jobs, in particular quality jobs, is discussed.
The quality of jobs issue is a timely topic, given Michigan’s current and persistent high level of unemployment. The unemployment rate in Michigan climbed from 7.1 percent in January to 7.5 percent in February. This is about 2 percent higher than the national rate of unemployment and ranks Michigan with Mississippi and Alaska as the states with the highest levels of unemployment. In fact, Michigan’s rate of unemployment was the highest in the U.S. in February 2005. Clearly, jobs are high on the list of concerns of elected officials in Lansing and will influence state fiscal policy for the next several years. The jobs issue will spill over into policy of immediate concern to the tourism industry, such as the state’s level of investment in travel advertising.
The quality of tourism industry jobs issue is rightly of concern to our industry since it leads to a diminished role for tourism in the economic development policy arena. While there are a few noteworthy exceptions, like the states of Hawaii and Florida and the gamblers Mecca, Las Vegas, when jobs are the focus of economic development policy makers, the tourism industry rarely merits serious consideration. In fact, it is not uncommon to hear policy makers state that their goal is NOT to create more “hamburger flipping” jobs (a.k.a. Tourism jobs); rather they want policies that create quality jobs in industries like manufacturing, high tech, and health sciences. Economic development gurus and their followers flock to the Research Triangle in North Carolina and the Silicon Valley in California for inspiration in creating models to emulate in rejuvenating less robust economies elsewhere across the nation. Unfortunately, this leads to less than optimal economic development policies for their economies and diminished government support for their tourism industries.
Regrettably, there isn’t an abundance of empirical evidence to counter the widely held perceptions that tourism industry jobs are of low quality. Since employment statistics available from government sources do not directly report tourism industry employment, because a unique Standard Industrial Classification (SIC) code for tourism has not been established, one can only roughly approximate the number of jobs tied to tourism included under related SIC codes, such as restaurants. Even defensible extrapolations of tourism jobs from such sources are poor indicators of tourism industry employment and especially wages earned in these jobs because the jobs covered by these sources are hourly payroll jobs. Of course, such jobs tend to lie toward the low end of incomes earned by tourism industry employees, thus such analyses lend credence to perceptions that jobs in our industry aren’t quality jobs. Since a significant percentage of these hourly wage earners hold jobs where they earn tips, their reported earnings are almost certainly less than their take home pay at the end of the day. But, the core problem with government employment statistics is that they don’t account for salaried positions in tourism or tourism business owner’s incomes. And, these are the very positions which cluster at the upper end of the tourism industry employee pay scale. Other industries, of course, share this limitation in capturing a complete picture of the quality of jobs they provide from government employment statistics, but our industry has relatively more small businesses and salaried employees. Hence, the downward bias in earnings is greater for tourism than most other industries.
Before a problem can be solved, it must first be recognized and be deemed worth solving. It’s my sense that the tourism industry has yet to perceive the quality of its jobs as a problem or one that it is willing to invest in solving. This is certainly a difficult and costly problem to resolve, which probably accounts for why it has received little if any prior research attention. Since the root of the problem is a negative public perception of the quality of tourism industry jobs, its solution ultimately must rest on swaying public opinion. Thus, my tendency as an economist to want to address it via a comprehensive (a.k.a. expensive and long term) economic research approach may not be necessary or even effective. Quite possibly we could begin to sway public opinion with a strategy built around a modest investment in targeted research coupled with a coordinated educational (a.k.a. public relations) campaign. This approach strikes me as feasible and worthy of serious consideration. As always, I welcome your feedback and appreciate your continuing interest and support!
And lest I forget, I want to share one unknown pundit’s definition of a quality job, “A quality job is one that pays you more than you are worth.”
Your feedback is welcome at dholecek@msu.edu.
