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The Changing Face of the Texas Labor Market

The Changing Face of the Texas Labor Market

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The Changing Face of the Texas Labor Market

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  1. 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) rich@cdr.state.tx.us (512) 491-4941

  2. Economic forecasting is a field that gives Astrology a good name!

  3. 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

  4. 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.

  5. Job Growth and the Economy • 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

  6. What do labor economists agree on? • There will be no shortage of opportunities in the knowledge sector for those with the education and intelligence to perform in it • 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

  7. 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”

  8. 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?

  9. Fewer Jobs in Goods Producing Sectors…

  10. Airlines, Oil & Gas, Computer and Accounting Services Shedding Jobs

  11. Education, Health & Govt. Buoy Economy

  12. U.S. Industries Adding Most Jobs 2000-2010 • 1. Computer and Data Processing 1.80 mil • 2. Retail Trade 1.60 mil • 3. Eating & Drinking Places 1.48 mil • 4. Offices of Health Practitioners 1.24 mil • 5. State and Local Education 1.07 mil • 6. Misc. Business Services 1.00 mil • 7. Construction 824 thou • 8. State and Local Government 808 thou • 9. Wholesale Trade 776 thou • 10. Health Services, NEC 689 thou • 13. Residential Care 512 thou • 14. Hospitals 509 thou • 16. Nursing/Personal Care Facilities 394 thou

  13. 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

  14. 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

  15. Texas Exports 2001 • Computer/Electronics $25.7 billion 27.0% • Chemicals $14.6 billion 15.4% • Machinery, ex. Electrical $12.8 billion 13.5% • Transportation Equipt $11.3 billion 11.8% • Electrical Components $4.8 billion 5.1% • Petroleum Products $3.7 billion 3.9% • Fabricated Metals $3.2 billion 3.4% • Plastic & Rubber Prod $2.8 billion 2.9% • Food & Kindred $2.6 billion 2.7% • Primary Metal Manuf. $2.1 billion 2.2% • Agricultural Products $1.9 billion 2.0%

  16. 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

  17. More Output…Not More WorkersU.S. Projections 2000-2010 (annual) 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 Communications 6.5% 1.2% • Computer Data Processing 8.0% 6.4%

  18. Technology Meets Apparel Manufacturing

  19. Technology Meets Barbeque…

  20. 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

  21. Texas Employment Distribution by Firm Size First Quarter 2001 Firm Of Firms Statewide Of Workers Statewide Size No. Percent No. Percent 0-4 243,788 55.3% 462,175 5.0% 5-9 77,816 17.7% 520,016 5.6% 10-19 52,239 11.9% 723,532 7.7% 20-49 38,203 8.7% 1,203,531 12.9% 50-99 14,554 3.3% 1,040,977 11.1% 100-249 8,820 2.0% 1,396,492 15.0% 250-499 2,826 0.6% 992,058 10.6% 500-999 1,242 0.3% 891,835 9.6% 1,000 plus 843 0.2% 2,106,265 22.6% Total 440,331 100.0% 9,336,881 100.0%

  22. Pattern of Change 1989-2001 Texas Employment Percentages by Firm Size Firm Pct of Workers Trend Size 1989 1992 1996 2001 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

  23. 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”

  24. Changing Nature of Work:New Paradigm for Career Ladders • 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

  25. Distribution of U.S. Employment by Education Category Education Category Employment 2000 2010 Percent distribution Jobs Added Between 2000-2010 Mean Annual Earnings 2000 Bachelors Degree or higher 20.7% 21.8% 29.3% $56,553 First Professional Degree 1.4% 1.4% 1.7% $91,424 Doctoral Degree 1.0% 1.1% 1.6% $52,146 Masters Degree 1.0% 1.0% 1.5% $43,842 Bachelors plus work experience 5.0% 5.2% 6.4% $69,967 Bachelors Degree 12.2% 13.0% 18.1% $48,440 Associate Degree 3.5% 4.0% 7.3% $41,488 Postsecondary vocational award 4.6% 4.7% 5.5% $31,296 Work experience 7.2% 8.5% 6.9% 5.0% $40,881 Long-term OJT 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

  26. Lifetime Earnings by Education Level in Texas Education Level Estimated Estimated Texas 2000 Lifetime Hourly Work Life Hours Earnings Earnings Short-term training 83,200 $8.26 $687,232 Moderate-term training 83,200 $11.32 $941,824 Long-term OJT* 83,200 $12.12 $1,008,384 Work Experience 83,200 $15.85 $1,318,720 Post-sec Vocational Award 83,200 $13.30 $1,106,560 Associate’s Degree 83,200 $17.72 $1,474,304 Bachelor’s Degree 83,200 $19.74 $1,642,368 Bachelor’s + Experience 83,200 $24.82 $2,065,024 Master’s Degree 83,200 $18.51 $1,540,032 Doctoral Degree 83,200 $19.53 $1,624,896 First Professional Degree 83,200 $35.61 $2,962,752

  27. A Changing Texas Labor Market (6) 9. Globalizationis 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

  28. 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

  29. 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

  30. Population Pyramids for Anglo and Hispanic Ethnic Groups in Texas, 2000 Anglo Hispanic Male Female Male Female

  31. 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.

  32. 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.

  33. 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 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 Projected Fastest Growing OccupationsBLS National 2000-2010

  34. 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 Fastest Growing 2000-2010

  35. 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 Occupational Growth in Texas Most Jobs Created 2000-2010

  36. 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

  37. The Secret is in Collaboration!