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Six Mega Trends That Are Jolting Six Mega Trends That Are Jolting the U. S. Labor Marketthe U. S. Labor Market
John TwomeyA Webinar Presented by the Workforce
Development Network and NYATEP
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What We’ll Talk About Today
We all know something very different is going on in the economy, let’s take a look at the major underlying factors ?
My hope is that you will find this information something you can use to explain today’s U. S. labor market to elected officials, Workforce Investment Boards, school boards, parents and students.
3
Acknowledgements
Much of the research you see here comes from the following 3 people who have worked diligently to shine a spotlight on the silent workforce crisis California and the United States faces:– Steve Gunderson, who is now CEO of the Council on
Foundations, recently of the Greystone Group; the co-author of the Jobs Revolution. http://www.jobsrevolution.com/
– Kati Haycock, the Director of the Education Trust is one of the leading child advocates in the field of education. http://www2.edtrust.org/edtrust/summaries2004/states.html
– Jared Bernstein, Director of the Living Standards Program at the Economic Policy Institute, formerly held the post of deputy chief economist at the U.S. Department of Labor. http://www.epi.org/
Any “crazy” conclusions are mine, not the result of their work.
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Because something is happening hereBut you don't know what it is
Do you, Mister Jones?- Bob Dylan
Major upheaval ahead in the Economy because:– Baby Boomer Retirements– Demographic Shifts– Increased payoff on educational attainment– Global Competition– Immigration– Off Shoring and Technology changes
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Which 2 factors do you think are most affecting today’s labor market? ( Select 2)
Baby BoomersDemographic ShiftsIncreased Education PayoffGlobal Competitor’s ActionsImmigrationOff ShoringTechnology Changes
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We’ll take a look at Now that We Know What’s Going On, What do We Do
Have we been doing the right things
If so, did we stay with them long enough to see if they work
Did we adequately fund them to meet the challenges
What else should we be doing…
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Setting the Stage
–“What business are you in”- the Iceman Cometh (and Go-eth)
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Major Drivers of Change in the Economy
Baby Boomer Retirements
9
13%
48%
22%
16%
3%
37%
22%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2000 2010
Traditionalist (1900-1945)Baby Boomer (1946-1964)Generation X (1965-1975)Generation Y (1976-1994)
Source: Bureau of Labor Statistics
Civilian Labor Force by GenerationNational Statistics
10
Major Drivers of Change in the Economy
Shifting Demographics
Bureau of the Census 11
2003 2010 2050
White: 73% 65% 53%(Non-Hispanic)
Hispanic: 11% 16% 24%
Black: 12% 13% 14%
Asians: 5% 7.3% 11%
Workforce Diversity: National Statistics
Rohit Talwar, at CWA 4/06 12
13
Major Drivers of Change in the Economy
Hugely Increased Payoff on Educational Attainment
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Employment Change by Education: 1992-2002
National Statistics
Employment Policy Foundation tabulation of BLS Statistics
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00Less than HighSchool--(-.4M jobs)High School -- +.1jobsSome College-- +2.4 M jobs2 Year Academic--+2.2 M jobs2 year Technical--+2.6 M jobs4 Year Degree-- +6.4 M jobs
Harris Interactive Polling 15
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Education Post-High School Matters National Statistics
75% of new job growth requires some level of post-high school training
1980 – 200019% growth in workers with post-high school education
2000 – 20204% growth in workers with post-high school education
17
Education Trust 18
Education Trust 19
Education Trust 20
African American and Latino 17-Year-Olds Read at Same Levels As
White 13-Year-Olds
0%
100%
150 200 250 300 350
Average Scale Score
Perc
ent o
f Stu
dent
s
White 13-Year-Olds African American 17-Year-Olds Latino 17-Year-Olds
Education Trust 21
African American and Latino 17-Year-Olds Do Math at Same Levels As
White 13-Year-Olds
0%
100%
200 250 300 350
Average Scale Score
Perc
ent o
f Stu
dent
s
White 13-Year-Olds African American 17-Year-Olds Latino 17-Year Olds
Education Trust 22
Education Trust 23
An Example of How State Data Looks: California
Education Trust 24
New York vs. Top 5 States
64%55%First-time freshmen completing BA in 6 years
84%81%Freshmen at 4-year colleges returning second year
61%61%Community college freshmen returning second year
52%34%HS freshmen entering any US College
Top StatesNew York
Education Trust 25
Education Trust 26
Math and Science Classes of Mostly Minority Students Are More Often Taught
by Misassigned Teachers
5 4%
86%
42%
69%
0%
10 0%
90-100% Non-White 90-100% W hite
Cert ified in F ield BA o r B S in F ield
Source: Jeannie Oakes, Multiplying Inequalities: The Effects of Race, Social Class, and Tracking on Opportunities to Learn Mathematics and Science (Rand, 1990).
Education Trust 27
College Graduates by Age 26
Young People From High-Income Families
75%
Young People From Low-Income Families
8%
Source: Tom Mortenson, Post Secondary Opportunity, 2004.
The Workforce Alliance 28
Pell Grants National Statistics
The maximum Pell Grant is currently only $4,050Pell can not effectively be used for most part time students. Many low-income working adults discover that they can benefit very little or not at all from Pell, due to an eligibility formula that calculates the Cost of Attendance differently for students attending half-time or more versus those attending less than half-time. Less than half-time students can count only a limited range of expenses - tuition, fees, books and supplies, dependent care expenses and transportation - towards their costs of attending school.Remember 62% of part time CC students work full timeSince 1980, the Pell Program appropriations have been insufficient to meet the needs of all eligible students.
Economic Policy Institute 29
Health & Pension Coverage for Recent High School Graduates Declining
1979 2002 Change Health Coverage 63.3% 34.7% -45.2% Pension 36% 20% -44.4%
30
Major Drivers of Change in the Economy
Global Competition in the new 24/7 World
Rohit Talwar, Fast Future, 4/06 31
Rohit Talwar, CEO Fast Future April '06
32
Malcolm Frank, Cognizant Corp. 33
Malcolm Frank, Cognizant 34
Education Trust 35
College Graduates Last Year
China 2.5 million
India 2.3 million
US 1.3 million
Malcolm Frank, Cognizant 36
Greystone Group 37
Knock, knock: Anybody home ?Four Year College Graduates
1999 2005
USA 1.3 Mil 1.3 Mil
China 950,000 2.5 Mil
Education Trust 38
College Completion Over Time
29%19%United Kingdom
36%16%Spain
45%30%Canada
48%20%Ireland
39%30%United States
20011970
Education Trust 39
Education Attainment: Then and Now
1970s 2003
Tertiary Completion* #1 #7
Source: Organization for Economic Cooperation and Development (OECD), Education at a Glance (September 2005).
Education Trust 40
55% of our 15-year-olds at problem-solving level 1 or below.
Closest other country?LATVIA
Education Trust 41
U.S. Ranks Low in the Percent of Students in the Highest Achievement Level (Level 6)
in Math
0
2
4
6
8
10Be
lgiu
mKo
rea
Japa
nFi
nlan
dN
ethe
rland
sN
ew Z
eala
ndSw
itzer
land
Aust
ral ia
Can
ada
Cze
ch R
epub
licIc
elan
dD
enm
ark
Swed
enO
ECD
Aver
age
Aust
riaG
erm
any
Fran
ceSl
ovak
Rep
ublic
Norw
ayIre
land
Pola
ndLu
xem
bour
gH
unga
ryU
nited
Sta
tes
Italy
Turk
eySp
ain
Portu
gal
Gre
ece
Mex
ico
Per
cent
of
Stu
den
ts
Source: Organization for Economic Cooperation and Development (OECD), PISA 2003 Results, data available at http://www.oecd.org/. PISA is the Program for International Student Assessment.
Education Trust 42
U.S. Ranks 23rd out of 29 OECD Countries in the Math Achievement of the Highest-
Performing Students*
300
350
400
450
500
550
600
650
700
Belg
ium
Japa
nKo
rea
Switz
erla
ndN
ethe
rland
sNe
w Z
eala
ndFi
nlan
dAu
stra
liaC
anad
aC
zech
Rep
ublic
Den
mar
kSw
eden
Ger
man
yO
ECD
AVER
AGE
Aust
riaIc
elan
dFr
ance
Slov
ak R
epub
licNo
rway
Hun
gary
Luxe
mbo
urg
Irela
ndPo
land
Unite
d St
ates
Spai
nIta
lyTu
rkey
Portu
gal
Gre
ece
Mex
ico
Aver
age
Scal
e Sc
ore
* Students at the 95th PercentileSource: Organization for Economic Cooperation and Development (OECD), PISA 2003 Results, data available at http://www.oecd.org/. PISA is the Program for International Student Assessment.
Education Trust 43
2003 PISA Problem-Solving Results: US #23
Source: Organization for Economic Cooperation and Development, PISA. Problem Solving for Today’s World, 2004. PISA is the Program for International Student Assessment.
44
Major Drivers of Change in the Economy
Immigration
Ctr for Labor Mkt Studies/ Northeastern U.
45
Where Does Immigration Fit in this Debate
Immigration is a gigantic factor in the US workforce right nowLast 5 years 43% of all the population growth in United States is from immigrationThat rate of foreign immigration as a share of total population growth percentage is higher than ever in US history79.6% of immigrants are working, higher than overall US labor force participationHow big is this issue?– Percent of foreign born in US labor force 1980 = 7.9%– This percent in 2000 jumped to 15.8%
Percent of High school dropouts, immigrants = 36.2% of workforce, native born 11% of workforce
Ctr for Labor Mkt Studies/ Northeastern U.
46
Immigration Effect on US born Youth
Soft skills an issueLabor force participation rate USA– 2000 = 64.5%– 2005 = 62.6%
– But for 16 to 19 year olds• 2000 = 46.3%• 2005 = 38.2% (Wow, a (Wow, a ––17.5% change in 5 years!)17.5% change in 5 years!)
Why: immigrant substitution; loss of unskilled jobs; increase inoff the books jobs
Note: in Philadelphia, unemployment rate for 16 – 19 year olds is the same whether foreign born or native born
Ctr for Labor Mkt Studies/ Northeastern U.
47
Immigration Pop Quiz
What American City has the second largest Bosnian population anywhere outside Bosnia ?– Utica, New York– St. Louis, Missouri– Toledo, Ohio– Chicago, Illinois
Education Trust 48
Education Trust 49
50
Major Drivers of Change in the Economy
Is it OffshoringOffshoring or TechnologyTechnology ?
Morgan Stanley Research 51
Fortune Magazine, May 15, 2006 52
Technology Pop Quiz
What country is #1 in mobile phone usage
#1 in cable TV subscriptions
#2 in Internet users
#4 in installed PCs
(Hint- It’s the same country)
Fortune Magazine, April 2006 53
The Dog That Didn’t Bark
Immigration “reform” in Congress has been in the news With all the press focus on immigration reform, almost no attention is being paid to immigration policies favoring high-skilled , well educated immigrants --from Fortune Magazine March 30, 2006
Since last August there have been -- with a couple of small exceptions -- no H1B visas available for skilled workers. And there won't be any new ones issued until October. "I represent a large number of multinational companies," Angelo Paparelli (an immigration lawyer with offices in New York and Irvine California) says, "and the attitude behind the scenes is,“If America won't let the H1Bs in, we'll go and create the jobs elsewhere."
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Labor Demand Will Outstrip Supply
Expected Labor Force and Labor Force Demand, 2002-2031
Source: Employment Policy Foundation analysis and projections ofCensus/BLS and BEA data.
130
140
150
160
170
180
190
200
210
2002 2006 2010 2014 2018 2022 2026 2030
Labor NeededLabor Available
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A Day in the Life
Travels with John, Summer 2005– The Airport– The Rental Car Counter– The Tool Booth– The Hotel– Kinko’s– The Train Station
The Chorus (that’s you)– “These were all jobs you could raise a family on with a high school
diploma, probably had a pension & health coverage.”
56
So What Do We Train for….
If Richard Riley and Robert Reich are right, what will
you train for…..
57
l “None of the top 10 jobs in 2010 exist today.”
Former Ed. Secretary Richard Riley
“Average person today will have 10-14 careers.”“Average job will last 3 – 5 years.”
Dept of Labor
Changing Jobs:
BLS 58
Mean number of jobs held between the ages of 18 and 32 (1978 to 1995) reported in 1995 by individuals ages 31 to 38 in 1995, by
level of education.SOURCE: Bureau of Labor Statistics (1998e).
59
How Did Are We Reacting as a Country ?
Decreased Funding
Isabelle Sawhill, speech to NCEE, 3/04
60
Yeah, but Cindi Lauper was right
Money Does Change EverythingThe Deficit, the Dollar, the War in IraqCutting the Deficit in half in 5 years, hard lessons from Belle Sawhill (Brookings Institute) :– Can you ignore the deficits?– Can you tax your way out of it?– Can you do it by cuts alone:– The 17%/ 53%/ 91% solutions
GAO 61
Workforce Funding as we confront these extraordinary challenges
According to Congress’ Government Accountability Office (GAO):
1. In 1978 we spent $9.5 Billion on job training2. Adjusted for inflation we’d have to spend $30
Billion today to stay at the same level3. Instead we are spending $3.5 Billion today4. Put another way, in this time of incredible
challenge to our national economic security, we are spending 11.7% of what we spent 28 years ago !!
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A Retrospective: Right Idea, Wrong Execution
One Stop Career CentersHope ScholarshipsLife Long Learning CreditWIA’s workforce development systemLocalized Labor Market InformationMore incumbent worker trainingPell grants, Not Your Father’s GI BillTargeted loan forgiveness in shortage areas
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After hearing the presentation, which 2 factors do you now think are most affecting today’s labor market? ( Select 2)
Baby BoomersDemographic ShiftsIncreased Education PayoffGlobal Competitor’s ActionsImmigrationOff ShoringTechnology Changes
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In a Nutshell That’s What I Know
Sometimes the biggest risk of all is staying the same………Email me for clarifications, or with any questions. I want you to be able to use this material to make more visible this silent workforce crisis.For More information contactJohn Twomey at jtwomey@nyatep.org
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