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Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
The Changing Labor Market: Current Conditions and Future
Predictions
Rachel HillmanRegional Labor Market Analyst
MN Dept. of Employment & Economic Development
St. Paul WorkForce Center
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
About DEED’s regional analysts
Collaborate with regional stakeholders on new research
Extend access to DEED reports and statistics
Conduct presentations and training onregional economy and labor market
Original research and analysis intended to answer “the tough questions”
Five regional analystsstationed across the state
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
What is labor market information?
Labor market information is any information about people, work and the job market:
Geographic area – where people work
Industry or business – who people work for
Occupation – what people do
Wages – how much they earn
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Firsthand knowledge versus LMI
Labor market information adds contextcontext to what we know from talking with people and what we read in the news…
Economy is all about jobsSt. Paul Pioneer Press – February 19, 2008
Job losses pile up St. Paul Pioneer Press – January 16, 2008
Consumers’ winter blues put a chill on economyStar Tribune – January 11, 2008
More manufacturers going greenStar Tribune – December 28, 2007
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Trends at a regional scale beyond employment and the labor force
Gaining 1 million people in 30 yearsRapid population growth on the developing edgeContinued spread of suburban and exurban developmentPopulation churn brings diversity and diversification of the region
Traffic congestion not getting betterGas prices not getting better
Finite supply of land = rising land pricesRedevelopment and intensification of land use in the core
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Twin Cities area labor shed (or where workers in the Twin Cities area live)
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Minnesota’s year end review
Over the year Minnesota gained 6,200 jobs in December 2007. REVISEDThis was below the nation’s growth rate of 0.9%. In terms of over-the-year job gains by sector, Minnesota is ahead of nationwide job growth in the education & health services and financial activities.
Manufacturing makes up a lower percent of employment than 6 years ago. The health care and financial services sectors are growing.
Minnesota’s unemployment rate was 4.0% in 2006 with 117,000 unemployed, but that doesn’t count “discouraged” or “marginally attached” workers. In 2007, monthly unemployment rates have been on the rise, reaching 4.7% in December.
Labor force participation rate is around 72.6%.
Number of job opportunities has remained consistent, but some occupations are in demand.
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Annual unemployment rates: Twin Cities, Minnesota, and U.S.
*Monthly rate not seasonally adjusted
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Alternative national unemployment rate calculations, January 2008
U-3 – Total unemployment, as a percent of the civilian labor force: 4.9%% *This is the official unemployment rate.*
U-4 – Total unemployed + discouraged workers, as a % of the civilian labor force + discouraged workers: 5.2%%
U-5 – Total unemployed + discouraged workers + all other marginally attached workers, as a % of the civilian labor force + all marginally attached workers: 6.0%%
U-6 – Total unemployed + all marginally attached workers + total employed part time for economic reasons, as a % of the civilian labor force + all marginally attached workers: 9.0%%
Source: Bureau of Labor Statistics, Current Population Survey
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Twin Cities statistics in unemployment insurance applicants, 2007
Age 22 to 29 -22%
Age 50 to 59 -19%
Age 40 to 49 -27%
Age 30 to 39 -23%
Age 60 to 64 -4%
65 Years of Age and
Over -1%
Under 22 Years of
Age -4%
Less than 12 years -
9%
Over 15 years -
17%
13 to 15 years -
34%
12 years -40%
Age of Unemployment Insurance Applicants, 2007
Educational Attainment of Unemployment Insurance Applicants, 2007
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Recent employment trends in the Twin Cities
Employment Change December 2005 to December 2007
Manufacturing -4,050 (-1.9%)Medical equipment and supplies mfg. +1,410 (3.7%)
Specialty Trade Construction -7,140 (-12.7%)
Professional and Business Services +8,290 (3.2%)(includes legal services, architectural and engineering services, computer systems designs, management of companies, administrative and support)
Health Care and Social Assistance +20,410 (10.3%)
All industries = +13,710 (0.8%)
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Employment changes since 2000
Manufacturing -36,500 (-15.4%)Machinery mfg. -8,860 (-28.9%)Navigational, measuring, electromedical and control instrument mfg. +2,100 (9.9%)Medical equipment and supplies mfg. +4,151 (37.4%)
Professional and Business Services -50 (0.0%)
Health Care and Social Assistance +53,930 (32.8%)
Leisure and Hospitality +19,000 (13.4%)(includes arts, entertainment, accommodation and food services)
Finance and Insurance +4,110 (3.9%)
All industries = +32,362 (1.8%)
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Minnesota job vacancy survey
In 2000, Minnesota’s Labor Market Information (LMI) Office began tracking the number of job vacancies currently open for hire.
Job vacancy statistics are produced twice a year for the second quarter (April to June) and fourth quarter (October to December).
Describe job vacancies in terms of:Education and experienceWagesPart-time/full-timeTemporary/seasonal or permanent
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Vacancies are down but the “nature” of vacancies has changed as well.
0
20,000
40,000
60,000
80,000
100,000
120,000
4Q
20
00
2Q
20
01
4Q
20
01
2Q
20
02
4Q
20
02
2Q
20
03
4Q
20
03
2Q
20
04
4Q
20
04
2Q
20
05
4Q
20
05
2Q
20
06
4Q
20
06
2Q
20
07
Nu
mb
er
of
Jo
b V
acan
cie
s
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000U
nem
plo
yed P
erson
s
Number of Job Vacancies
Number of Unemployed
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Where are the jobs now?
35,150 job openings in the Twin Cities job market during 2nd Quarter 2007
2.2% job vacancy rate5.4 job vacancies for every 10 unemployed people
Hiring demand is highest in some high-skill occupations:Health care practitioners and technicalManagement Health care supportComputer and mathematicalBusiness and financial operations
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Job vacancies by industry sector
Prof., Scientific, & Technical Services
8%Educational
Services8%
Finance & Insurance
7%
Accommodation7%
Information6%
Other Services5% Retail Trade
8%
Manufacturing10%
11 Other Industries
25%
Health Care16%
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Occupations with the most openings in the Twin Cities
Job Opening
Median Wage Offer
Registered Nurses 1,277 $23.30 Retail Salespersons 1,064 $8.00 Home Health Aides 1,021 $11.50 Office Clerks, General 987 $11.00 Computer Software Engineers, Applications 826 $23.08 Sales Representatives, Wholesale and Mfg. 784 $19.23 Cashiers 703 $8.00 Laborers and Freight, Stock, and Material Movers 670 $10.00 Waiters and Waitresses 638 $6.15 Network and Computer Systems Administrators 624 $28.85 Nursing Aides, Orderlies, and Attendants 604 $11.00 Hairdressers, Hairstylists, and Cosmetologists 558 NATruck Drivers, Heavy and Tractor-Trailer 540 $16.83 Management Analysts 487 $24.04 Sales Representatives, Services, All Other 459 $14.42 Customer Service Representatives 458 $12.79 Network Systems and Data Communications Analysts 455 $12.00
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Median starting wage rates of job vacancies
Source: MN Dept of Employment & Economic Development
1%
13%
11%
17%
12%
8%
6%5%
27%
0%
5%
10%
15%
20%
25%
30%
Under$6.15
$6.15 to$7.99
$8.00 to$9.99
$10.00 to$11.99
$12.00 to$13.99
$14.00 to$15.99
$16.00 to$17.99
$18.00 to$19.99
$20.00and over
Median Wage of all openings =
$13.00
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Skill levels required for job openings in the Twin Cities
0%
10%
20%
30%
40%
50%
60%
2001 2002 2003 2004 2005 2006 2007
Per
cen
t o
f T
win
Cit
ies
Job
Vac
anci
es
Post-Secondary
Entry Level
Note: Second quarter data presented.
Source: MN Dept of Employment & Economic Development, Minnesota Job Vacancy Survey
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Are these occupations in demand?
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Occupations in demand
• Sort jobs by wages, growth rates or education/training
requirements
• Job titles link to educational programs in
Minnesota for these occupations
• Job codes link to I*SEEK career
information for these occupations
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Minnesota’s industrial and occupational employment projections
Every states’ Labor Market Information (LMI) Office is charged with producing employment projections on an industry and occupational level.
Projections are estimated over a 10 year period every two years for the nation, state and regions.
Projections are largely based on past trends. We cannot predict:Recessions, depressions, energy crises, etc.WarsTechnology changeNew business processesLegislation
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Where will the jobs be?
In the Twin Cities region, we project that 225,000 new jobs will be created between 2004 and 2014 – this is a 13% growth rate.
Another 402,000 new work force entrants will be needed to replace workers who have retired or otherwise left their position.
More than one-fourth of the new jobs will be either an education or health related job.
Post-secondary education will be required for 15 of the top 20 fastest growing jobs in the Twin Cities.
16 of the top 20 occupations have average wages of greater than $20/hour.
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Health care will add the most new jobs in the Twin Cities.
-2,463
-250
-180
-47
3,244
4,223
5,199
5,390
5,773
9,048
10,214
10,244
12,723
12,752
17,369
19,761
23,924
24,405
46,672
-10,000 0 10,000 20,000 30,000 40,000 50,000
Manufacturing
Agriculture, Forestry, Fishing & Hunting
Utilities
Mining
Arts, Entertainment, & Recreation
Real Estate & Rental & Leasing
Transportation & Warehousing
Information
Wholesale Trade
Management of Companies &Enterprises
Other Services, Ex. Public Admin
Construction
Finance & Insurance
Educational Services
Retail Trade
Accommodation & Food Services
Professional & Technical Services
Administrative & Waste Services
Health Care & Social Assistance
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Projected employment growth by detailed industry
0 5,000 10,000 15,000 20,000 25,000
Miscellaneous Manufacturing
General Merchandise Stores
Financial Investment & Related Activities
Publishing Industries
Real Estate
Personal and Laundry Services
Credit Intermediation and Related Activities
Membership Organizations & Associations
Insurance Carriers and Related Activities
Specialty Trade Contractors
Nursing and Residential Care Facilities
Hospitals
Management of Companies and Enterprises
Social Assistance
Educational Services
Food Services and Drinking Places
Ambulatory Health Care Services
Administrative and Support Services
Professional, Scientific & Technical Services
Number of New Jobs
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Fastest growing occupations in the Twin Cities, 2004 to 2014
Network Systems and Data Communication AnalystsHome Health AidesPersonal and Home Care AidesPhysician AssistantsComputer Software Engineers, ApplicationsComputer Software Engineers, Systems SoftwareBiomedical EngineersAthletic TrainersHazardous Materials Removal WorkersMedical Assistants
Dental HygienistsDental AssistantsCommunity and Social Service SpecialistsMedical ScientistsDatabase AdministratorsBiochemists and BiophysicistsEnvironmental EngineersNetwork and Computer Systems AdministratorsVocational Education Teachers, PostsecondarySocial and Human Services Assistants
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Occupations adding the most jobs in the Twin Cities, 2004 to 2014
Retail Salespersons
Registered Nurses
Combined Food Preparation and Serving Workers, Fast Food Workers
Personal and Home Care Aides
Computer Software Engineers, Applications
Customer Service Representatives
Home Health Aides
Janitors and Cleaners
Accountants and Auditors
Waiters and Waitresses
Office Clerks, GeneralReceptionists and Information ClerksSales Representatives, Wholesale and ManufacturingExecutive Secretaries and Administrative AssistantsComputer Software Engineers, Systems SoftwareTruck Drivers, Heavy and Tractor-TrailerSocial and Human Services AssistantsComputer Systems AnalystsNetwork Systems and Data Communications AnalystsCarpenters
Source: MN Dept of Employment & Economic Development
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Skill and knowledge areas for “in demand” jobs
Skills areas projected to be most utilized by future occupations:
Reading ComprehensionActive ListeningSpeakingWritingActive LearningCoordinationMonitoringInstructingCritical Thinking
Knowledge areas projected to be most utilized by future occupations:
Customer ServiceMathematicsClericalEducation/trainingEnglishSales/marketingPsychologyComputers/electronicsAdministration/management
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Skills shortage…now!Almost half of respondents said the availability of qualified applicants was a concern, but even more (77%) said they were concerned about the cost of employee benefits.
1 in 12 1 in 12 were concerned about the number of pending employee retirements
Hiring difficulties were more pronounced in healthcare and manufacturing.
Increased hours for current employeesUsed temporary agency employeesShifted work to other company locations
Employers generally saw hiring problems as an issue of quality, not quantity.
About one-third indicated that they have trouble with employee retention and turnover.
Competition from other local firmsCompetition from metropolitan area firmsRetirements
27% are concerned about the skill levels of their current employees.
9 out of 10 employers provide some type of on-the-job training.
73% said they need to offer employee training because it is a business necessity.
Source: MN Dept of Employment & Economic Development, South Central Employer Survey Results, July 2006.
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Perceived deficiencies
Perceived Deficiencies of Job Seekers
Unstable work history (64%)
Not enough work experience (56%)
Poor technical skills – as demonstrated in the selection process (35%)
Too little formal education (26%)
Poor language or communication skills in an interview (20%)
Poor reading or comprehension skills – as demonstrated in the selection process (16%)
Poor math skills – as demonstrated in the selection process (4%)
Perceived Deficiencies of Current Workforce by Employers
Concerned with Employee Skills
Inadequate basic employability skills, e.g. attendance, timeliness, work ethic (48%)
Inadequate problem-solving skills (30%)Inadequate reading/writing or communication skills (30%)
Inability to work in a team environment (27%)
Inadequate math skills (15%)
Lack of degree or vocational technical training (13%)
Source: MN Dept of Employment & Economic Development, South Central Employer Survey Results, July 2006.
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Return of labor shortage worries
Job growth is projected to be steady overall, but very high in some industries like health care
An increasingly tight labor marketThe existing workforce is agingLabor force growth is slowing and will start shrinking
While renewed economic growth will tighten the labor market, demographics may play an even bigger role.
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
0%
10%
20%
30%
1950-1960
1960-1970
1970-1980
1980-1990
1990-2000
2000-2010
2010-2020
2020-2030
Twin Cities US
Twin Cities population forecast compared to United States: growth per decade, 1950-2030
Source: U.S. Census Bureau, Metropolitan Council estimates
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
20 Year projected change in Twin Cities population by age group (2005-2025)
6% 7% 10%
-10%-16%
-2%
22%
80%
125% 121%
68%
4%2%9%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+
"Future WorkforceEntrants"
The "EchoBoom"
Declining Pool of "Skilled Workers"
The "Baby Boom" & Older Population
Po
pu
lati
on
Ch
an
ge
be
twe
en
20
05
an
d 2
02
5
Source: MN State Demographic Center
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Immigration is a key growth component
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1955-1960 1965-1970 1975-1980 1985-1990 1995-2000
White
Racialminority
Twin Cities residents new to the US
Source: U.S. Census Bureau, Metropolitan Council estimates
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
A more diverse population and workforce
Minnesota’s nonwhite and Latino populations are projected to grow substantially faster than the white population
By 2030, 1 in every 5 Minnesotans will be Hispanic or of colorSource: MN State Demographic Center
“Only 10 percent of baby boomers in the Metro area are from a minority group, but minorities comprise one-quarter of the next generation of workers.”Source: Mind the Gap: Disparities and Competitiveness in the Twin Cities,Brookings Foundation Metropolitan Policy, October 2005.
In 2005, 6.3 percent of Minnesota's total population were foreign born.
In 2005, the foreign born represented 6.8 percent of Minnesota's civilian employed workforce.
The number of foreign-born workers in Minnesota grew by 37.9 percent between 2000 and 2005.
Source: Migration Policy Institute
In 2005, 3.7 percent of employed workers in Minnesota were limited English proficient.Source: Migration Policy Institute
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Future labor force growth in the Twin Cities
Source: MN State Demographic Center
34,080
5,830
-20,690
-10,380
15,000
70,030
-30,000
-10,000
10,000
30,000
50,000
70,000
2005 to2010
2010 to2015
2015 to2020
2020 to2025
2025 to2030
2030 to2035
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
What does this mean?
We expect 225,000 new jobs to be created between 2004 and 2014 in the Twin Cities.
Labor force projections estimate 104,000 new workforce entrants between 2005 and 2015.
Will the education/skills of these workers match employer demand?
AND…this does not even include the openings that will exist as people start to retire.
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Labor force participation rates
Minnesota ranks 2nd nationwide for the percent of people age 16 to 64 who are in the labor force – 72.9% in 2006.
The labor force participation rate of women in Minnesota was 68.3% in 2006, the 2nd highest rate in the United States.
Minnesota teens (16 to 19 years of age) have one of the highest labor force participation rates in the country.
Minnesota ranks 7th nationwide in the employment rate of people with disabilities.
Trends show that labor force participation of people 65 years of age and over has been growing in the past 10 years.
Minneapolis-St. Paul MSA ranks 3rd nationwide in the percent of people 65 years of age and over engaged in the labor force - 25% in 2006.
Source: BLS, Geographic Profile of Employment & UnemploymentCornell University, Rehabilitation Research and Training Center of Disability Demographics and Statistics
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Connecting workforce supply and demand: some solutions
Education system working to meet demandGetting the word out of youth and displaced workers“Marketing” high demand occupationsEstablishing career ladders in the workforce
development system
Increase productivityNew technologiesMore – and specialized – training
Outsource or offshore
Expand recruitment efforts and increase in-migration
Increase labor force participation (or lower unemployment) for certain groups
Analysis & Evaluation Office Communication, Analysis & Research Division MN Department of Employment & Economic Development
Minnesota-produced Labor Market Information is online at:
www.deed.state.mn.us/lmi
Rachel HillmanRegional Labor Market Analyst
Phone: 651.642.0728E-mail: [email protected]