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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.

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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)

rich@cdr.state.tx.us

(512) 491-4941



A changing texas labor market
A Changing Texas Labor Market name!

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

Harry Truman is purported to have said, name!

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
Job Growth and the Economy name!

  • 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


What do labor economists agree on
What do labor economists agree on? name!

  • 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


What do labor economists agree on ii
What do labor economists agree on? (II) name!

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
A Changing Texas Labor Market name!(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?





U s industries adding most jobs 2000 2010
U.S. Industries Adding Most Jobs 2000-2010 Shedding Jobs

  • 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


More jobs in services
More Jobs in Services… Shedding Jobs

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
Job Declines in Goods Producing Sectors Shedding Jobs

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
Texas Exports 2001 Shedding Jobs

  • 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%


A changing texas labor market 3
A Changing Texas Labor Market Shedding Jobs(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
More Output…Not More Workers Shedding JobsU.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%




A changing texas labor market 4
A Changing Texas Labor Market Shedding Jobs(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


The changing face of the texas labor market

Texas Employment Distribution by Firm Size Shedding Jobs

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%


The changing face of the texas labor market

Pattern of Change 1989-2001 Shedding Jobs

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


A changing texas labor market 5
A Changing Texas Labor Market Shedding Jobs(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
Changing Nature of Work: Shedding JobsNew 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


The changing face of the texas labor market

Distribution of U.S. Employment by Education Category Shedding Jobs

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


The changing face of the texas labor market

Lifetime Earnings by Education Level in Texas Shedding Jobs

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


A changing texas labor market 6
A Changing Texas Labor Market Shedding Jobs(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


Global labor market of the 21 st century

Global Labor Market of the 21 Shedding Jobsst 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
How Globalization Impacts the Shedding JobsLabor 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
Population Pyramids for Anglo and Hispanic Shedding JobsEthnic Groups in Texas, 2000

Anglo

Hispanic

Male Female

Male Female


Educational attainment concerns
Educational Attainment Concerns Shedding Jobs

  • 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
A Changing Texas Labor Market Shedding Jobs(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 Shedding Jobs

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


Occupational growth in texas fastest growing 2000 2010

1. Computer Support Specialists Shedding Jobs

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


Occupational growth in texas most jobs created 2000 2010

1. Customer Service Representatives Shedding Jobs

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


A changing texas labor market 8
A Changing Texas Labor Market Shedding Jobs(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