Following up on this recent CD post about the stunning free-fall in newspaper advertising revenue over the last decade to a 62-year low in 2012, the chart above displays: a) annual inflation-adjusted newspaper advertising revenue (red line), and b) the annual number of newspaper employees (blue line). As would be expected there is a very close historical relationship between newspaper advertising and newspaper payrolls (correlation = 0.912).
Just like newspaper advertising revenue, employment levels at US newspapers went into a free-fall decline starting about 2000. A decade later in 2010, newspaper payrolls of 253,500 fell below the 1950 level of 269,000 for the first time, and by 2012 newspaper jobs collapsed even further – to 221,400 industry jobs in December. Compared to the peak employment level of 455,600 newspaper jobs in 1988 in the pre-Internet era, payroll levels at newspapers today are less than half of that – only 218,500 newspaper jobs in January – the lowest monthly employment level for the newspaper industry since the BLS started tracking those jobs in January 1947.
As I commented before, the dramatic collapse in newspaper ad revenues and payrolls since 2000 has to be one of the most significant Schumpeterian gales of creative destruction in recent years. And it’s not over. One recent special report from IBISWorld on “Dying Industries” identified newspaper publishing as one of ten industries that may be on the verge of extinction in the United States.