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 InclusionDigitalization 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 Inclusion

Prosperity

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

OccupationAutomatio

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

clerks86% 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 HoustonSelected 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

OccupationAutomatio

n potentialHouston 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 BerubeSenior Fellow and Deputy Director

Brookings Institution Metropolitan

Policy

Morag WatsonVice President

BP

Ernesto ChavarinDirector of BPM

Management

Microsoft

Amanda EdwardsHouston City

Council Member

Peter BeardSenior 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