Y2K And Beyond: The Future of Oregon’s Workforce … Part One

1. Y2K And Beyond: The Future of Oregon’s Workforce … Part One The Current Situation Presentation to Oregon Workforce Advisory Committee Graham Slater, Oregon Employment Department August 27, 1999

2. Outline • The Role of Labor Market Information. • Five current characteristics of Oregon’s economic health. • Three major issues for consideration. • One example of policy possibilities. • Looking to the future.

3. The Role of Labor Market Information • Designation under Workforce Investment Act (WIA). • Responsibilities under WIA -- customers, customers, data! • State and Local Planning. • Education Program Planning.

4. Five Current Characteristics … • Population growth continues … • Unemployment rates (statewide) at very low levels … • Employment growth slower in 1998 and 1999 … • Employment growth widespread among industries; inconsistent among regions. • Wages outpacing inflation.

5. Population growth continues ...

6. Statewide unemployment rates at very low levels …

7. Employment growth slower …

8. Manufacturing showing definite downturn in 1998 and 1999. • Down: lumber and wood, food and kindred. • Rebounding: metals and high tech. • Up: transportation equipment • Services strong. • Business services • Eng./mgmt. svcs. • Health svcs. • Retail flat.

9. Construction showing definite slowing in 1998 and 1999 … but still at historically very high levels.

10. Employment growth widespread among industries …

11. … but not among regions.

12. Wages are finally outpacing inflation … In the last two years ... • Retail average earnings up 11% … from $8.99 to $9.99. • Manufacturing up 9% … from $13.32 to $14.52. • All other industries fairly flat.

13. Three Major Issues … • Unemployment … • Labor shortage … • Geographic disparities …

14. 93,000 Oregonians are unemployed … for a variety of reasons • Frictional … • Seasonal … • Cyclical … • Structural … • No skills … • Discouraged?

15. Current labor shortages across Oregon ... • Based on an informal survey of Oregon Employment Department field offices in August 1999. • Field offices all around Oregon reported some difficult-to-fill occupations. • Reasons are varied: low wages and a lack of qualified workers for more skilled occupations, especially in the more rural areas of the state, were two common responses. • Most often cited occupations: several medical-related jobs (CNAs, RNs, and LPNs), heavy equipment operators, truck drivers, auto mechanics, journey level construction occupations, and a variety of minimum wage jobs. • In addition to the low wage received by minimum wage workers, these jobs are often part time and they often involve weekend work. Employers are starting to offer wages slightly above minimum wage and offer more hours to workers.

16. Sometimes, employers are looking for very basic skills ... • “Often, the 20-somethings walking in to apply for work don’t even bother to change out of jeans and T-shirts or shave.” • “If somehow they were able to teach the importance of a work ethic, that’s what we would look for.” • “We need our employees to be punctual and really want to work. Anything else, we can train.”

17. According to a recent survey by the American City Business Journals (2/99) • Labor shortage now more of a concern to small business than taxes, health care costs, and government mandates. • Half of the survey participants said their company finds it very or somewhat difficult to hire new employees. • Over one-third said their company finds it very or somewhat difficult to retain employees. • Approximately one-third think the availability of qualified employees in their region declined during the second half of 1998. • More than half said their company has not taken any particular action. • Among those who are taking some action, the leading steps are increasing wages (mentioned by 12% of the respondents overall) and increasing employee benefits (11%).

18. According to a recent survey by the American Management Association(2/99) • More than a third of job applicants lack the basic math and reading skills needed to do the job they are seeking. • Increased from 19 percent in 1996. • Primary cause … tightening of the labor market. • Secondary cause … higher skill levels required in today’s workplace. • Examples … • warehouse supervisor now uses computer, tracks inventories, researches products on-line • auto mechanic now understands computer diagnostics, electronic systems • Some companies would rather do without than hire unsuitable candidates.

19. Unemployment rates vary widely.

20. Again, job growth is uneven across the state.

21. Fast facts across Oregon … • Oregon Coast … slowest-growing, lumber and paper down, tourism had slow start, dairy strong, 500-job announcement in North Bend. • Portland Metro … high tech improving, impact of Asia crisis passing, many growth announcements, services growth faster in ‘99 than in ‘98. • Willamette Valley … manufacturing and high tech still weak in mid-Valley, layoffs at Fairview, Eugene area faring best. • Southern Oregon … manuf. layoffs in every county, gains in nonmanuf., Boise Cascade rebuilding in Medford, RFP will add 100. • Central Oregon / Columbia Gorge … lumber gains and high tech layoffs in Central Oregon, lumber losses along Gorge, Umatilla strong. • Eastern Oregon … USFS down 10% in Grant, Corrections up 22% in Malheur, lumber stable in Baker, strong in Wallowa, down in Union.

22. One policy possibility … • Identify shortage occupations meeting key criteria: • short-term demand • long-term demand • employer involvement in process • identification of reasons for shortage • Develop special programs to move people into these occupations. • Develop fast-track approval for training programs in these occupations.

23. Another policy possibility … • Identify “excellent practices” in employee recruitment … share and encourage these practices across Oregon. • Real world example in Central Oregon hospitality industry: • “We can’t take another year like this.” • Providing bus transportation and free lunch for workers. • Special focus/outreach to Hispanic workers. • Hourly wages of $8-$9 per hour. • Educational opportunities for workers.

24. Looking to the future ... • Statewide and regional industry projections … 1998-2008. • Statewide and regional occupational projections … 1998-2008. • Wages, educational requirements, and skills … 1998-2008.

25. I’ll be back next month … • Questions or comments? Contact: Graham Slater (503) 947-1212 Graham.J.Slater@state.or.us • Internet access? http://olmis.emp.state.or.us