The Data Economy is a Rich Source of High-Paying Jobs

April 3, 2015 by Joshua New Masters in Data Science


Last month, the U.S. Department of Commerce published a report that found data is fueling a rapid growth in high-paying, high-skilled jobs in the public and private sector and transforming the United States’ occupational landscape. The report, titled “The Importance of Data Occupations in the U.S. Economy,” defined “data jobs” as occupations which place high importance on analyzing data, processing data (i.e. coding and auditing), and interacting with computers (i.e. writing software and performing data entry) and found that there were 10.3 million of these jobs in 2013 (about 7.8% of all employment in the US). The report acknowledges that this is a conservative estimate — if the criteria were broadened to include jobs that describe these activities as just “important,” instead of “very important,” the category would include 64 million jobs, or 59% of total employment in the United States.

What’s Driving This Job Growth?

The increased use of data in the private sector has been one of the leading drivers of job growth in the past decade. Of the 10.3 million data jobs identified in the report, 8.6 million are in the private sector. These jobs are highly paid, with an average hourly wage of $40.30 in 2013 — 68% higher than the average wage for all of industry. From 2003 to 2013, the private sector industries that are considered data-intensive (meaning that at least 25% of their employees are in data jobs) increased their number of data jobs by 21%, compared to the overall average job growth of 5% for this period. Additionally, these data-intensive industries grew faster during the economic recovery period of 2010-2013, seeing a 9.4% increase in employment, compared to the 6.2% overall average. Any attempts at enacting broad-based privacy legislation that would limit data collection could hinder the potential for the private sector to find new applications for data, and thereby create jobs to act on these opportunities.

What Kinds of Workers and Skills Are Required?

Data workers were found to be considerably more educated than average. Nearly 70% have a bachelor’s degree or higher. By comparison, just about 35% of the overall workforce has that level of education. To sustain the growth of the data economy, the United States needs a workforce that is educated to meet the needs of companies that want to innovate and grow in the United States. The labor market is already struggling to meet this demand, creating a data science skills gap, and this problem will only grow worse if educational institutions on all levels do not adequately equip the emerging workforce with the necessary data skills.

What Should We Do About It?

To ensure that the economy’s growth is not hindered by a lack of qualified workers, federal and state lawmakers should promote data science education at all levels. Policymakers should fund efforts to expand enrollment in statistics and computer science courses and support the development of massive open online courses that teach data skills, and are accessible to both those in school, and those already in the workforce seeking to become data-literate. Secondary schools can also help develop a pipeline of future data-literate workers by creating more flexible math requirements, enabling students to satisfy them by taking computer science or statistics courses instead.

It is important to note that this report uses data from 2013. The trend towards more data-driven industry and the creation of more data jobs has no doubt continued, if not accelerated, since then, driven in part by new technologies like the Internet of Things. As companies increasingly rely on data to improve operations and develop new products, there will be an even greater need for policymakers to develop a workforce that can make use of all this data and, and for them to craft policies that allow such technologies to flourish.

Joshua New is a policy analyst at the Center for Data Innovation. His research focuses on methods of promoting innovative and emerging technologies as a means of improving the economy and quality of life. The Center for Data Innovation is a non-profit, non-partisan think tank studying the intersection of data, technology, and public policy. Based in Washington, DC, the Center formulates and promotes pragmatic public policies designed to maximize the benefits of data-driven innovation in the public and private sectors.