Employment in the wireless industry is still healthy, despite the downturn in the overall economy. Indeed, the number of people wireless carriers directly employ declined about 2.4% in the last year. At a time when the national unemployment rate is trending upward at 9.8%, the wireless industry remains fairly unscathed.
“There has been some paring back as people look for new efficiencies,” said John Walls, VP of public affairs at national wireless trade association CTIA. According to CTIA’s mid-year survey of wireless carriers, service providers directly employed 261,453 people, down 2.4%, or 6,402 people from a year ago when carriers directly employed 267,855 workers. The 2009 survey is the first employment decline noted since CTIA began conducting it in 1985.
CTIA shed more light on wireless employment and how the wireless industry contributes to the overall economy in a July ex parte filing with the Federal Communications Commission. The filing includes an economic analysis of the wireless industry, including employment analysis written by Dr. Harold Furchtgott-Roth, president of Furchgott-Roth Economic Enterprises, prepared with a grant from CTIA. Furchtgott-Roth was an FCC commissioner from 1997 to 2001.
The analysis, conducted in January 2009, found that more than 2.4 million U.S. jobs are directly or indirectly dependent on the wireless industry, and that wireless jobs “command compensation that is more than 50% higher than the national average of other production workers.”
As with most studies, some of the data is a few years old, but likely still relevant. The wireless services industry in 2006 and 2007 directly employed nearly 250,000 workers. (For comparison, that figure is still 10,000 fewer employees than CTIA’s estimated employment for the first half of 2009.) Annual payrolls for 2006 exceeded $14 billion and more than $16 billion in 2007. Texas had the most people employed in the wireless industry at that time, while California boasted the highest payroll. Most states had payrolls in excess of $100 million, Furchtgott-Roth found. These figures do not include fringe benefits or contract workers.
Average hourly earnings of production workers for core networked communications services in 2007 dollars broke down under the following: Telecommunications workers averaged $24.57 per hour; employees for wireline telecommunications carriers averaged $23.67 per hour, while employees for wireless telecommunications carriers averaged $27.93 per hour.
Wireless services are also the driver in the broader networked communications business, Furchtgott-Roth said. Wireless services contributed nearly $100 billion to the U.S. economy in 2007, while the broader communications segment contributed nearly $250 billion and wireless upstream and downstream industries added another $100 billion, totaling $450 billion, or about 3.2% of the nation’s Gross Domestic Product. “In addition, the closely related computer industries contributed slightly less than $500 billion to the American economy, and jointly the communications and computer industries contributed more than $930 billion to the economy or more than 6.7% of GDP.”
CTIA pointed out “the magnitude of this economic contribution” when compared to other industry segments in its ex parte filing. “The contribution from wireless services are, by themselves, greater than those of the motor vehicle manufacturing sector, motion pictures, and many large sectors of manufacturing. Indeed, the wireless sector alone is comparable to the entire economic contribution from the agricultural sector in the U.S.”
The wireless industry continues to re-invest in itself, Walls said, noting that carriers spend about $20 billion a year in capital expenses. “In the past two years, I can’t imagine a more aggressive or pronounced commitment to the industry than the wireless sector,” he noted.
