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The Changing Face of the Texas Labor Market
Texas Labor-Management Conference San Antonio, Texas
May 28, 2003
Richard Froeschle, DirectorCareer Development Resources(CDR)[email protected](512) 491-4941
Economic forecasting is a field that gives
Astrology a good name!
Short Term Trends and the Economy• Overall job growth not occurring. Services are not
making up for lost manufacturing jobs/wages. Watch personnel supply services!
• Manufacturing jobs hardest hit, esp. telecom. Globalization increases price competition, challenges to market share. Commoditization & Outsourcing
• Capacity utilization at 20 year lows. No need for new investment in plant and equipment
• Terrorist threats continue to dampen growth. War & terrorism affect some industries more… airlines, travel/lodging, retail (“going to the mall”)
• High energy prices increase production costs, limit consumers. Lower prices help consumers/business
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Monthly
U.S. Consumer Confidence Index
Consumer Confidence Index
Sept 11, 2001
Short Term Trends and the Economy (part 2)
• Low interest rates good for some sectors, housing, financial services, autos
• Low stock prices & smaller profits lead to corporate cost containment. Bad stock market returns affect insurance industry, consumer wealth effect, tempers business expansion plans
• Government, health services, education leading job growth engines
• Overall consumer uncertainty and confidence levels fall and rise with war threats, gas prices, layoffs, corporate corruption, stock & job market malaise
Harry Truman is purported to have said,
All my economists say, “on the one, or on the other hand”…what I
really need is a one-handed economist.
What do labor economists agree on?
1. There will be no shortage of opportunities in the knowledge sector for those with the education and intelligence to perform in it
2. 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)
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
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
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?
Fewer Jobs in Goods Producing Sectors…
.
Airlines, Oil & Gas, Computer and Accounting Services Shedding
Jobs
Education, Health & Govt. Buoy Economy
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
More Jobs in Services… 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 SectorsTexas 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• 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)
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
Technology Meets Apparel Manufacturing
Technology Meets Barbeque…
More Output…Not 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%
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 don’t need training
Pattern of Change 1989-2001Texas Employment Percentages by Firm Size
Firm Pct of Workers TrendSize 1989 1992 1996 2001
0-4 4.92 5.78 5.16 5.0 SMALL INCREASE5-9 5.68 7.02 5.97 5.6 SLIGHT DECLINE10-19 6.92 9.12 8.01 7.7 INCREASE20-49 10.26 14.52 13.11 12.9 INCREASE50-99 8.34 11.62 10.91 11.1 BIG INCREASE100-249 11.52 14.64 14.56 15.0 BIG INCREASE250-499 9.24 9.04 9.77 10.6 INCREASE500-999 9.02 7.87 9.53 9.6 SMALL INCREASE1000 + 34.10 20.48 22.98 22.6 MAJOR DECLINE
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”
Changing Nature of Work:New Paradigm for Career
Ladders1. 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
Distribution of U.S. Employment by Education Category
Education CategoryEmployment
2000 2010Percent distribution
Jobs Added
Between2000-2010
Mean Annual
Earnings 2000
Bachelors Degree or higher
20.7% 21.8% 29.3% $56,553First Professional Degree 1.4% 1.4% 1.7% $91,424Doctoral Degree
1.0% 1.1% 1.6% $52,146Masters Degree 1.0% 1.0% 1.5% $43,842Bachelors 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% $40,881Long-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
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
How Globalization Impacts the
Labor 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
Male Female Male Female
Anglo Hispanic100 + years
95 to 99 years90 to 94 years85 to 89 years80 to 84 years75 to 79 years70 to 74 years65 to 69 years60 to 64 years55 to 59 years50 to 54 years45 to 49 years40 to 44 years35 to 39 years30 to 34 years25 to 29 years20 to 24 years15 to 19 years10 to 14 years
5 to 9 years< 5 years
0
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200,
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300,
000
400,
000
500,
000 0
100,
000
200,
000
300,
000
400,
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500,
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300,
000
400,
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000 0
100,
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Educational Attainment Concerns
• 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)
11. A changing industry mix is resulting in changing occupational demand and skill sets, with an emphasis on lifelong learning.
Occupational Growth in Texas Fastest Growing 2000-2010
1. Computer Support Specialists
2. Computer Software Engineers, Apps
3. Network & Systems Administrators
4. Desktop Publishers5. Computer Software
Engineers, Systems6. Network & Data
Communications Analysts
7. Computer Specialist, NEC
8. Database Administrators 9. Medical Records
Technician10. Social Services Assistants11. Special Education
Teachers12. Computer Systems
Analysts13. Medical Assistants14. Physician Assistants15. Information Systems
Mgrs.
Occupational Growth in Texas Most Jobs Created 2000-2010
1. Customer Service Representatives
2. Food Prep and Serving Workers, Fast Food
3. Child Care Workers4. Retail Salespersons5. Registered Nurses6. Cashiers7. Computer Support
Specialists8. 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
The Workplace of the Future...
The factory of the future has just one man and one dog. The man’s job is to feed the dog. The dog’s job is to keep the man from touching the equipment.