Transcript The Changing Face of the Texas Labor Market

The Changing Face of the
Texas Labor Market
Texas Labor Market Information Conference
Austin, Texas
June 11, 2003
Richard Froeschle, Director
Career Development Resources(CDR)
[email protected]
(512) 491-4941
Why Do We Care About
Changing Workplace
Practices?
• Affects education, skill and training requirements
to get people employed
• Affects the composition of available job
opportunities by industry and occupation
• Provides a context for employer contact,
communicates understanding of evolving business
environment
• Affects job search strategies, job hunting
behaviors, career development planning
Economic
forecasting is a
field that gives
Astrology a good
name!
Short Term Trends and the Economy
• Overall job growth is very slow. Services are not
making up for lost manufacturing jobs/wages.
Watch personnel supply services!
• Manufacturing jobs hardest hit, esp. telecom.
Globalization increases price competition, challenges
to market share. Commoditization & Outsourcing
• Capacity utilization at 20 year lows. No need for new
investment in plant and equipment
• Terrorist threats continue to dampen growth. War &
terrorism affect some industries more… airlines,
travel/lodging, surveillance/security, defense, retail
(“going to the mall”)
Short Term Trends and the Economy
(part 2)
• Low interest rates good for some sectors, housing,
financial services, autos
• Low stock prices & smaller profits lead to corporate
cost containment. Bad stock market returns affect
insurance industry, consumer wealth effect, tempers
business expansion plans
• Government, health services, education leading job
growth engines
• Overall consumer uncertainty and confidence levels
fall and rise with war threats, gas prices, layoffs,
corporate corruption, stock & job market malaise
U.S. Consumer Confidence Index
Sept 11, 2001
120.0
100.0
80.0
60.0
40.0
20.0
0.0
03
20
3
ay 0
M 20 3
pr 0
A 20
3
ar 0
M 20
b 03
Fe 20
n 02
Ja 20
2
ec 0
D 20
2
ov 0
N 20
2
ct 0
O 20
p 02
Se 20 2
ug 0
A 20 2
ly 00
Ju e 2 2
n 0
Ju 20
2
ay 0
M 20 2
pr 0
A 20
2
ar 0
M 20
b 02
Fe 20
n 01
Ja 20
1
ec 0
D 20
1
ov 0
N 20
1
ct 0
O 20
p 01
Se 20 1
ug 0
A 20 1
ly 00
Ju e 2
n
Ju
ConsumerMonthly
Confidence Index
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.
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
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
Fewer Jobs in Goods Producing Sectors…
Airlines, Oil & Gas, Computer and
Accounting Services Shedding Jobs
Education, Health & Govt. Buoy Economy
A Changing Texas Labor Market
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?
U.S. Industries Adding Most
Jobs 2000-2010
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•
•
•
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•
•
•
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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
Opportunities: More Jobs in Services…
Texas Absolute Job Growth 1999-2002
•
•
•
•
•
•
•
•
•
•
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
•
•
•
•
•
•
•
•
•
•
•
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
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
Technology Meets Apparel Manufacturing
A Changing Texas Labor Market
5. More jobs in small firms. Greater use of
outsourcing, leased or temp workers and
independent contract labor means fewer and
shorter career ladders within a firm
6. For those working within companies,
workplace practices are changing.
Organizational structure moving from
pyramid to flatter pyramid to hour glass, so
fewer ports of entry for low skill workers
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
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
A Changing Texas Labor Market (6)
7. Globalization is changing
economic theory, business
practices and labor supply
options
Why Do We Care About
Globalization?
• Must understand effects of global
capitalism on the job creation and
destruction process
• To engage employers, must understand
the market factors they face
• Better understand what jobseekers face,
what employers are telling them
• Better prepare jobseekers to meet the
skill and attitude needs of employers
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
See “Churning in a Hypothetical Economy” from
Technology Workers in the New Texas Economy
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
Impacts of Globalization on Business
• Businesses with global reach access more
customers and get exposed in new
markets
• Businesses with regional niche lose local
customers to a global market place
• Business is exposed to supply chain
opportunities to acquire lower cost inputs
• Business is exposed to new labor supply
options; foreign affiliates (L-1visa), H1B,
global outsourcing, contract workers
Recognizing Growth Potential
in your own Regional Economy
• To whom does the industry sell and are
those sectors expanding?
• Is the industry cost structure
competitive? e.g. are labor costs
competitive relative to value added?
Relative to market scope/niche?
• Do they have Positive Pricing Power in
their marketplace (setting prices ore
responding to prices)? PPP results in
higher profits!
A Changing Texas Labor Market
7. A changing
industry mix is
resulting in changing
occupational demand and
skill sets, with an emphasis on
lifelong learning.
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
The Workplace of the
Future...
The factory of the
future has just one
man and one dog.
The man’s job is to
feed the dog. The
dog’s job is to keep
the man from
touching the
equipment.