Transcript The Changing Face of the Texas Labor Market

The Changing Face of the
Texas Labor Market
TWC Quarterly Workforce Forum
Omni Southpark Hotel in Austin, Texas
April 9, 2003
Richard Froeschle, Director
Career Development Resources(CDR)
[email protected]
(512) 491-4941
Economic
forecasting is a
field that gives
Astrology a good
name!
A Changing Texas Labor Market
1. If it’s not a recession, it’s still not
fun! Downturn affects output,
employment, tax revenues,
employment in all sectors
2. Economists still very divided on
duration, turning point signals, and
level of job growth in recovery
Harry Truman is purported to have said,
All my economists say, “on the one,
or on the other hand”…what I
really need is a one-handed
economist.
Job Growth and the Economy
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Overall job growth not occurring
Manufacturing jobs hard hit
High energy prices hit production costs
Low stock prices lead to cost containment
War uncertainty temper expansion plans
War & terrorism affect some industries
more…airlines, travel/lodging/retail
• Government leading growth engine
U.S. Consumer Confidence Index
Sept 11, 2001
120.0
100.0
80.0
60.0
40.0
20.0
0.0
03
20
ar 03
M 20
3
b
Fe 200
n 02
Ja 20
ec 02
D 20
ov 02
N 20
ct 02
O 20
p 02
Se 20
2
ug 0
A 20
2
ly 00
Ju 2
ne 02
Ju 20
ay 0 2
M 20
pr 02
A 20
ar 02
M 0
2
2
b
Fe 200
n 01
Ja 20
ec 01
D 20
ov 01
N 20
ct 01
O 20
p 01
Se 20
1
ug 0
A 20
1
ly 00
Ju 2
ne
Ju
ConsumerMonthly
Confidence Index
What do labor economists agree on?
1. There will be no shortage of
opportunities in the knowledge sector
for those with the education and
intelligence to perform in it
2. All jobs, even the most low-skilled, will
require higher levels of basic education,
math, communication and technology
skills…for survival and growth
3. Those without some specialized
knowledge or skill are likely to suffer
declining real wages
What do labor economists agree on? (II)
4. The Digital Divide exists and those on
the wrong side will have limited hiring
and advancement opportunities
5. Jobs requiring “human touch” will
continue to be in demand e.g. health
services and nursing, construction…no
robot plumbers!
6. Workplace settings and business
practices and knowledges will change
rapidly, making lifelong learning essential
e.g. life after “paving the cow path”
A Changing Texas Labor Market (2)
3. Continued transition to services,
not products for value-added and
employment opportunities
Increase in “high tech” and “high
touch” jobs
What comes after the Knowledge
economy? The Creativity Economy? The
Celebrity Economy?
Fewer Jobs in Goods Producing Sectors…
Airlines, Oil & Gas, Computer and
Accounting Services Shedding Jobs
Education, Health & Govt. Buoy Economy
U.S. Industries Adding Most
Jobs 2000-2010
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1. Computer and Data Processing
2. Retail Trade
3. Eating & Drinking Places
4. Offices of Health Practitioners
5. State and Local Education
6. Misc. Business Services
7. Construction
8. State and Local Government
9. Wholesale Trade
10. Health Services, NEC
13. Residential Care
14. Hospitals
16. Nursing/Personal Care Facilities
1.80 mil
1.60 mil
1.48 mil
1.24 mil
1.07 mil
1.00 mil
824 thou
808 thou
776 thou
689 thou
512 thou
509 thou
394 thou
More Jobs in Services…
Texas Absolute Job Growth 1999-2002
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Educational Services
Food Services/Drinking Places
Ambulatory Health Care Services
Professional and Technical Services
Local Government
Specialty Trade Contractors
General Merchandise Stores
Hospitals
Heavy and Civil Construction
Motor Vehicle and Parts Dealers
Job Declines in Goods Producing Sectors
Texas Industries Losing Most Jobs 1999-2002
• Agriculture/Forestry Support
• Computer/Electronic Manufacturing
• Apparel Manufacturing
• Transportation Equip Manufacturing
• Fabricated Metal Manufacturing
• Chemical Manufacturing
• Oil & Gas Extraction
• Food & Beverage Stores
• Administrative Support Services
• Federal Government
Texas Exports 2001
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Computer/Electronics
Chemicals
Machinery, ex. Electrical
Transportation Equipt
Electrical Components
Petroleum Products
Fabricated Metals
Plastic & Rubber Prod
Food & Kindred
Primary Metal Manuf.
Agricultural Products
$25.7 billion
$14.6 billion
$12.8 billion
$11.3 billion
$4.8 billion
$3.7 billion
$3.2 billion
$2.8 billion
$2.6 billion
$2.1 billion
$1.9 billion
27.0%
15.4%
13.5%
11.8%
5.1%
3.9%
3.4%
2.9%
2.7%
2.2%
2.0%
A Changing Texas Labor Market (3)
4. Technology implementation will
enhance productivity and transform
many job sites and skill sets. What
jobs can be replaced by technology
(sheep shearing, textile inspector,
electronic insurance processing,
voice recognition)? What jobs does
technology create? see….
Burlington/Nano-Tex, Texasinabox.com
More Output…Not More Workers
U.S. Projections 2000-2010 (annual)
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Industry Sector
Output
Employment
Computers & Related
7.0%
1.6%
Chemicals
3.3%
.4%
Industrial Machinery
6.1%
.5%
Transportation Equipment
3.7%
1.1%
Motor Vehicles
4.4%
0.8%
Electrical Equipment
5.3%
0.6%
Fabricated Metal Products
3.6%
0.8%
Plastics and Rubber
4.0%
1.4%
Telephone Communications6.5%
1.2%
Computer Data Processing
8.0%
6.4%
Technology Meets Apparel Manufacturing
Technology Meets Barbeque…
A Changing Texas Labor Market (4)
5. More jobs in small firms, greater use of
leased and independent contract labor
means fewer and shorter career ladders
6. Higher overall workforce education levels
encourage fewer internal career ladders,
fewer growth options for unskilled when
they get a job e.g. hire outside folks who
don’t need training
Texas Employment Distribution by Firm Size
First Quarter 2001
Firm
Size
Of Firms Statewide
No.
Percent
0-4
5-9
10-19
20-49
50-99
100-249
250-499
500-999
1,000 plus
Total
243,788
77,816
52,239
38,203
14,554
8,820
2,826
1,242
843
440,331
55.3%
17.7%
11.9%
8.7%
3.3%
2.0%
0.6%
0.3%
0.2%
100.0%
Of Workers Statewide
No.
Percent
462,175
520,016
723,532
1,203,531
1,040,977
1,396,492
992,058
891,835
2,106,265
9,336,881
5.0%
5.6%
7.7%
12.9%
11.1%
15.0%
10.6%
9.6%
22.6%
100.0%
Pattern of Change 1989-2001
Texas Employment Percentages by Firm Size
Firm
Size
Pct of Workers
1989 1992 1996 2001
Trend
0-4
4.92
5.78 5.16 5.0 SMALL INCREASE
5-9
5.68
7.02 5.97 5.6 SLIGHT DECLINE
10-19
6.92
9.12 8.01 7.7 INCREASE
20-49
10.26 14.52 13.11 12.9 INCREASE
50-99
8.34 11.62 10.91 11.1 BIG INCREASE
100-249 11.52 14.64 14.56 15.0 BIG INCREASE
250-499 9.24
9.04 9.77 10.6 INCREASE
500-999 9.02
7.87 9.53 9.6 SMALL INCREASE
1000 + 34.10 20.48 22.98 22.6 MAJOR DECLINE
A Changing Texas Labor Market (5)
7. For those working within companies,
organizational structure moving from
pyramid to flatter pyramid to hour glass,
so fewer ports of entry for low skill
workers
8. Workplace earnings are increasingly
correlated with education and earnings
inequality is increasing based on education
and the “Digital Divide”
Changing Nature of Work:
New Paradigm for Career Ladders
1. Increased employment growth in
service industries with higher
percentages of workers in the
secondary labor market
2. More jobs being created in smaller
firms with shorter or less well-defined
promotional ladders
3. Increased role for contingent workers,
outsourcing, independent contractors
with few formal promotional ladders
Distribution of U.S. Employment by Education Category
Education Category
Bachelors Degree or higher
Employment
2000
2010
Percent distribution
Jobs Added
Between
2000-2010
Mean
Annual
Earnings
2000
20.7%
21.8%
29.3%
$56,553
1.4%
1.4%
1.7%
$91,424
1.0%
1.1%
1.6%
$52,146
1.0%
1.0%
1.5%
$43,842
5.0%
5.2%
6.4%
$69,967
12.2%
13.0%
$48,440
Associate Degree
18.1%
3.5%
4.0%
7.3%
$41,488
Postsecondary vocational
award
Work experience
4.6%
4.7%
5.5%
$31,296
7.2%
8.5%
6.9%
5.0%
$40,881
8.0%
4.2%
$33,125
Moderate-term OJT
19.0%
18.4%
14.1%
$29,069
Short-term OJT
36.6%
36.3%
34.6%
$19,799
First Professional Degree
Doctoral Degree
Masters Degree
Bachelors plus work
experience
Bachelors Degree
Long-term OJT
Lifetime Earnings by Education Level in Texas
Education Level
Estimated
Lifetime
Hours
Short-term training
Moderate-term training
Long-term OJT*
Work Experience
Post-sec Vocational Award
Associate’s Degree
Bachelor’s Degree
Bachelor’s + Experience
Master’s Degree
Doctoral Degree
First Professional Degree
83,200
83,200
83,200
83,200
83,200
83,200
83,200
83,200
83,200
83,200
83,200
Estimated
Hourly
Earnings
$8.26
$11.32
$12.12
$15.85
$13.30
$17.72
$19.74
$24.82
$18.51
$19.53
$35.61
Texas 2000
Work Life
Earnings
$687,232
$941,824
$1,008,384
$1,318,720
$1,106,560
$1,474,304
$1,642,368
$2,065,024
$1,540,032
$1,624,896
$2,962,752
A Changing Texas Labor Market (6)
9. Globalization is changing economic theory,
business practices and labor supply options
10. Changing demography affects everything
from education needs, working with diversity,
consumer tastes, tax structure, retirement
Global Labor Market of the
21st Century
Creative destruction—The process of
simultaneous job creation and job destruction as
new skill sets are required and old skills become
outdated. The same employers will be both
hiring and laying off continually regardless of
labor market conditions to enhance productivity
and competitive edge.
Joseph Schumpeter
How Globalization Impacts the
Labor Market—The Basics
• Globalization & new digital technology opens
producer/consumer markets around the world
• Increased customer access to producers leads
to global price competition, driving employer
need for greater productivity, lower prices
• Increased price competition leads to cost
containment pressures
• Cost containments leads employers to new
supply chain practices, concerns over labor
costs, alternative labor options
Population Pyramids for Anglo and Hispanic
Ethnic Groups in Texas, 2000
Anglo
Hispanic
100 + years
95 to 99 years
90 to 94 years
85 to 89 years
80 to 84 years
75 to 79 years
70 to 74 years
65 to 69 years
60 to 64 years
55 to 59 years
50 to 54 years
45 to 49 years
40 to 44 years
35 to 39 years
30 to 34 years
25 to 29 years
20 to 24 years
15 to 19 years
10 to 14 years
5 to 9 years
< 5 years
0,
50
0
00
00
00
00
00
,0
,0
,0
,0
0
0
0
0
40
30
20
10
Male
0
0,
10
0
00
0,
20
0
00
0,
30
Female
0
00
0,
40
0
00
0,
50
0
00
0
0
0
0
0
00
00
00
00
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,
,
,
,
,
0
0
0
0
0
50
40
30
20
10
Male
0
0
0
0
0
0
00
00
00
00
00
,
,
,
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0
0
0
0
0
10
20
30
40
50
Female
Educational Attainment Concerns
• Hispanics are much less likely to complete HS
(62.8%) than Blacks (86.8%) or Whites (94%)
• Hispanic drop out rates (28.6%) are twice as
high as Blacks and four time higher than
Whites
• Hispanic and Black 15-17 year olds are more
likely to be below modal grade
• Hispanics HS grads are less likely to be
enrolled in college than Blacks or Whites and
much less likely to have received a Bachelor’s
degree.
A Changing Texas Labor Market (7)
11. A changing industry mix
is
resulting in changing
occupational demand and
skill sets, with an emphasis on
lifelong learning.
Projected Fastest Growing Occupations
BLS National 2000-2010
• Fastest Growing
• Computer Software
Engineers Applications
• Computer Support Specialists
• Computer Software
Engineers Systems
• Network Administrators
• Systems Communication
Analyst
• Desktop Publishers
• Database Administrators
• Personal Home Care Aides
• Computer Systems Analysts
• Medical Assistants
• Adding Most Jobs
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Fast food Prep Wrkers
Customer Service Reps
Registered Nurses
Retail Sales Workers
Computer Support
Specialists
Cashiers, ex. Gaming
General Office Clerks
Security Guards
Software Applications
Engineers
Waiter/Waitress
Occupational Growth in Texas
Fastest Growing 2000-2010
1. Computer Support
Specialists
2. Computer Software
Engineers, Apps
3. Network & Systems
Administrators
4. Desktop Publishers
5. Computer Software
Engineers, Systems
6. Network & Data
Communications
Analysts
7. Computer Specialist,
NEC
8. Database Administrators
9. Medical Records Technician
10. Social Services Assistants
11. Special Education Teachers
12. Computer Systems
Analysts
13. Medical Assistants
14. Physician Assistants
15. Information Systems Mgrs.
Occupational Growth in Texas
Most Jobs Created 2000-2010
1. Customer Service
Representatives
2. Food Prep and Serving
Workers, Fast Food
3. Child Care Workers
4. Retail Salespersons
5. Registered Nurses
6. Cashiers
7. Computer Support
Specialists
8. Office Clerks, General
9. Waiters & Waitresses
10. General and Operations
Managers
11. Elementary School
Teacher
12. Teacher Assistants
13. Secondary School Teacher
14. Janitors and Cleaners
15. Truck Drivers, Heavy and
Tractor Trailer
A Changing Texas Labor Market (8)
12. All education and workforce development
is part of economic development.
Industry Clusters and regional targeting
must emphasize regional collaboration.
13. The economic future of the region will
depend on understanding the market
factors faced by the employer community
and how you shape policies to take
advantage of that environment
The Secret is in Collaboration!