The Changing Face of the Texas Labor Market

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The Changing Face of the Texas Labor Market

• Rural Workforce Network
• Lubbock, Texas
• February 11, 2003
• Richard Froeschle, Director
• Career Development Resources(CDR)
• rich_at_cdr.state.tx.us
• [phone]

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Why Do We Care About Understanding the Labor
Market?

• Improve Job Search. Identify industry and
  occupational areas with economic activity (pos
  neg) to guide job search for all customers
• Reduce Frictional Unemployment. Improve
  efficiency of universal job search process by
  directing clients to occupational areas in demand
• Employer Contact. From the targeted list, develop
  a hot prospects or potential sales contact
  list. Better than cold calling! Provides
  rationale for contact strategy and improves staff
  efficiency
• Increase the likelihood of job placements. Assist
  in connecting education training programs with
  actual job openings e.g. finding jobs after exit

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Why Labor Market Targeting (continued)

• Improving Workforce Program Performance. Research
  demonstrates targeting leads to improved
  placement rates and Board performance
• Connect Local Partners. Knowledge basis for
  forming industry partnerships/clusters to
  leverage funds, share resources, promote
  solutions
• Connect to Regional Economic Development
  Strategies. Focus on targeted industries or
  clusters. Plan the work, allocate the resources,
  work the plan
• Understand the competition for jobs. Think like
  an employer, think globally, plan (and act)
  locally. Prepare yourself and your clients
  accordingly!

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Economic forecasting is a field that gives
Astrology a good name!
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Does this Sound Like an Economist?
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A Changing Texas Labor Market

• 1. If its not a recession, its 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

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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 skillsfor survival
  and growth
• 3. Those without some specialized knowledge or
  skill are likely to suffer declining real wages

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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,
  constructionno 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

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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?

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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

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Texas Industries Adding the Most Jobs 1999-2002

• Absolute Growth
• 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

• Percent Change
• Warehousing and Storage
• Management of Companies
• Financial Investment
• Heavy and Civil Construction
• Support Activities for Mining
• Ambulatory Health Care Services
• Utilities
• General Merchandise Stores
• Educational Services
• Motor Vehicles/Parts Dealers
• (NAICS codes)

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Industries Losing the Most Jobs from 1999-2002

• Absolute Change
• Agriculture/Forestry Support
• Computer/Electronic Manuf.
• Apparel Manufacturing
• Transportation Equip Manuf.
• Fabricated Metal Manuf.
• Chemical Manuf.
• Oil Gas Extraction
• Food Beverage Stores
• Administrative Support Services
• Federal Government
• (NAICS codes)

• Percent Change
• Agriculture/Forestry Support
• Apparel Manufacturing
• Computer/Electronic Manuf.
• Transportation Equip Manuf.
• Wood Product Manuf.
• Misc. Manufacturing
• Printing and Related Support
• Oil Gas Extraction
• Electrical Equipment and Appliances
• Paper Manufacturing

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Texas Exports 200194.995 billion in 2001

• Computer/Electronic Products (27.0)
• Chemicals (15.3)
• Industrial Machinery (13.5)
• Transportation Equipment (11.9)
• Electrical Equipment (5.1)
• Petroleum (3.9)
• Fabricated Metal Products (3.4)
• Plastics and Rubber (2.9)

• Mexico (41.0)
• Europe (11.8)
• Southeast Asia (11.8)
• Canada (10.8)
• Asia (8.6)
• South America (5.5)
• Africa (4.8)
• Middle East (3.6)

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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

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More OutputNot 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

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Technology Meets Apparel Manufacturing
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Technology Meets Barbeque
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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 dont need training

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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
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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
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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

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Changing Nature of WorkNew 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

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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 Bachelors Degree 83,200 19.74
1,642,368 Bachelors Experience 83,200 24
.82 2,065,024 Masters
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
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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

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Globalization and the U.S. Economy

• Total World Gross National Income (Product) 2001
  31,500,012 million
•  
• United States Gross National Product 2001
  9,900,724 million
•  
• The FACT is that the United States economy
  represents 31.4 percent of the World Economy.
•  
• The REALITY is that the top 20 richest countries
  represent 85 percent of the World Economy and the
  top 10 richest account for 74 percent.
•  

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What Is an American Company?Percent of 2000
Revenue Outside U.S.

• YUM Brands Inc. 34.5
• General Motors 26.2
• Ford 30.4
• Boeing 34.3
• Intel 58.8
• Coca Cola 61.0
• Federal Express 29.9
• Emerson Electric 40.0

• Texaco 65.9
• IBM 57.9
• Motorola 52.5
• Johnson/Johnson 38.2
• John Deere 25.1
• Colgate 69.4
• Nike 50.3
• Hasbro 36.0

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Global Labor Supply Competition is Real!

• India is positioned to become the worlds
  information technology hub
• Indias software exports are expected to grow
  from 8 billion in 2001 to 57 billion by 2008,
  providing 4 million jobs.

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The Competition for Financial Services Jobs
   
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Impacts of Globalization on Consumers

• Broader access to a wider variety of products and
  services than neighborhood offers
• Greater vendor diversity leads to better buying
  opportunities, lower prices eg. comparison
  shopping via Internet
• Lost allegiance to domestic producers what about
  the union label or U.S. TVs??
• More volatile labor market with stronger
  competition from global labor supply

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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, H1B, global outsourcing

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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.

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Projected Fastest Growing OccupationsBLS
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
• 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

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Occupational Growth in Texas Fastest Growing
2000-2010

• 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.

• 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

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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

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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

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The Secret is in Collaboration!
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The Future is Uncertain

• Predictions--statements indicating that something
  definitely will happen in the future--are
  generally impossible, due to human decisions that
  alter the future and to the many uncertainties
  inherent in human life

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Foretelling the FutureThere Are No Gypsys with
Crystal Balls!Futurists suggest things that
might happen in the future so that people can
decide what they want to make happen.