Workforce Development in the 21st Century Workforce Development in the 21st Century A discussion for

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  • Workforce Development

    in the 21st Century

    A discussion for Houston’s civic influencers, presented by Microsoft and

    featuring the Brookings Institution.

  • Digitalization of the American Workforce

    Raamel Mitchell

    Central U.S. Citizenship & Public

    Affairs Director, Las Colinas

    Campus Director

    Workforce Development in the 21st Century

  • Welcome Remarks

    Raamel Mitchell

    Central U.S. Citizenship & Public

    Affairs Director, Las Colinas

    Campus Director

    Paula Pineda

    City of Houston Office

    of Business Opportunity

    Workforce Development in the 21st Century

  • The Future of Work

    Workforce Development in the 21st Century

    Alan Berube

    Senior Fellow and Deputy Director

    Brookings Institution Metropolitan

    Policy

  • Programmed Inclusion Digitalization and Opportunity

    Alan Berube, Brookings Metropolitan Policy Program

    @berubea1 Building a 21st century workforce, Houston, April 16, 2019

  • Ensuring the future works3

    Inclusion, prosperity…and tech

    How’s Houston doing?

    1

    2

  • Inclusion, prosperity…

    and tech

  • Growth Inclusio n

    Prosperit y

    Economic success requires growth, prosperity, and inclusion

    Jobs

    GDP

    Entrepreneurshi

    p

    Productivity

    Standard of living

    Average wages

    Employment

    rateMedian earnings

    Relative poverty rate

  • Greater inclusion yields faster growth

    Source: Brookings analysis of Opportunity Insights data

    -0.6%

    -0.4%

    -0.2%

    0.0%

    0.2%

    0.4%

    0.6%

    Lowest Highest

    Upward mobility for low-income children

    Annualized GDP per capita growth rate

    100 largest metro areas, 2005-14

  • Tech, meanwhile, both empowers and divides

  • Tech empowers: Digitalization brings higher wages

    Source: Muro et al., “Digitalization and the American workforce”

    $ 30 K

    $ 48 K

    $ 73 K

    Low Medium High

    Average annual wage by digital score

    United States, 2016

  • Tech divides: Tech tends to increase wage dispersion

    0.0%

    0.5%

    1.0%

    1.5%

    2.0%

    2.5%

    3.0%

    3.5%

    4.0%

    4.5%

    5.0%

    Average annualized growth rate by occupation group

    United States, 2010-16

    Source: Muro et al., “Digitalization and the American workforce”

    Less

    Digital

    More

    Digital

  • How’s Houston doing?

  • Houston’s economy has grown, but hasn’t delivered greater prosperity and inclusion

    Source: Berube et al., “Metro Monitor 2019”

    2007-17 trends

    GROWT

    H

    PROSPERITY INCLUSION

    +17% (13th)

    Jobs

    +19% (22nd)

    GDP

    +4% (8th)

    Jobs at

    young firms

    +2% (74th)

    Productivity

    -4% (78th)

    GDP per

    capita

    +5% (55th)

    Average

    annual wage

    +0.1% (49th)

    Median

    earnings

    -3% (53rd)

    Relative

    poverty

    -0.3% (67th)

    Employment

    rate

  • Automation and AI will exacerbate these trends

  • Automation has already caused significant labor market change

    Source: Muro et al. “Automation and artificial intelligence: How machines are affecting people and places”

    -20%

    -10%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    0 20 40 60 80 100

    Occupational wage percentile, 1980

    Routine-task

    intensity

    Employment share change, 1980-

    2016

  • Source: Muro et al. “Automation and artificial intelligence: How machines are affecting people and places”

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    0 10 20 30 40 50 60 70 80 90 100

    Occupational wage percentile

    Automation potential

    United States, 2016

    Looking forward, automation may affect low-wage sectors more

  • Source: Muro et al., “Automation and artificial intelligence: How machines are affecting people and places”

    Houston ranks among the top third of large metro areas for likely automation pressures

    46.3% Avg. automation

    potential in Houston

    31st Highest among 100

    largest metro areas

    39.1% - 44% 44% - 46% 46% - 48% 48% - 50% 50% - 56.0%

    Average automation potential

    100 largest metro areas, 2016

  • Source: Brookings analysis of EMSI data

    Many low-skill Houston jobs are highly vulnerable to automation

    Occupation Automatio

    n

    potential

    Houston

    employment, 2017

    Combined food prep and serving workers 87% 89,100

    Waiters and waitresses 77% 56,900

    Stock clerks and order fillers 86% 42,000

    Heavy and tractor-trailer truck drivers 81% 38,600

    Bookkeeping, accounting, and auditing

    clerks 86% 33,200

  • Several already-vulnerable groups may experience more disruption

    49%

    28%

    51%

    41%

    48%

    43%

    37% 36%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    Less than a

    Bachelor's

    Bachelor's or

    higher

    16-24 25-54 Hispanic Black Asian White

    Average automation potential in Houston

    By education/age/race, 2017

    Source: Brookings analysis of 2017 American Community Survey microdata

  • 0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    All occupationsTransportation Personal care All occupations Food service All occupations Facilities care Construction

    Source: Brookings analysis of 2017 American Community Survey microdata

    Share of employment in Houston Selected occupation groups, 2017

    Hispanic workersYoung workersSub-baccalaureate workers

    These groups are overrepresented in exposed occupations

  • Source: Brookings analysis of EMSI data

    Other “safe” occupations are growing

    Occupation Automatio

    n potential Houston employment

    CAGR, 2010-18

    Personal care aides 24% +12.1%

    Financial analysts 11% +7.6%

    Software developers, applications 8% +7.6%

    Business operations specialists 18% +7.5%

    Mobile heavy equipment mechanics 28% +7.4%

  • Ensuring the future

    works

  • Promote a

    constant

    learning

    mindset

    Emphasize

    inclusion

    Reduce

    hardships for

    those who are

    struggling

  • Promote a

    constant

    learning

    mindset

    • Embrace data to understand

    what’s happening

    • Expand accelerated learning

    and certifications

    • Make skill development

    more financially accessible

    • Align and expand traditional

    education

    • Cultivate uniquely human

    qualities

  • Emphasize

    inclusion

    • Target career on-ramps on

    under-represented

    populations

    • Aim digital, technical, and

    skills training at needs of

    vulnerable cohorts

    • Maximize hiring through

    subsidized employment

  • Reduce

    hardships for

    those who are

    struggling

    • Expand income supports for

    workers in low-paying jobs

    • Reduce financial volatility

    for workers in service

    industries

    • Increase portability of

    benefits

  • For more

    information:Alan Berube Senior Fellow

    Metropolitan Policy Program at

    Brookings

    aberube@brookings.edu

    @berubea1

  • Panel Discussion

    Workforce Development in the 21st Century

    Alan Berube Senior Fellow and Deputy Director

    Brookings Institution Metropolitan

    Policy

    Morag Watson Vice President

    BP

    Ernesto Chavarin Director of BPM

    Management

    Microsoft

    Amanda Edwards Houston City

    Council Member

    Peter Beard Senior Vice President,

    Regional Workforce Development

    Greater Houston Partnership

  • Thank you!

    Workforce Development in the 21st Century

    Peter Beard

    Senior Vice President,

    Regional Workforce Development

    Greater Houston Partnership