Maine Workforce Trends

Veteran’s Conference Point Lookout, Northport

September 24, 2015

Glenn Mills

Chief Economist Center for Workforce Research

Maine Dept. of Labor www.maine.gov/labor/cwri

Glenn.mills@maine.gov 207-621-5192

Maine has had no real GDP growth in the last decade

75%

100%

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175%

200%

225%

250%

19

75

19

77

19

79

19

81

19

83

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85

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87

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89

19

91

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93

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97

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Ind

ex o

f G

DP

in 2

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United States

Maine

More recently, job growth has been slower than the nation in the recovery from the 2008-09. Maine still has fewer jobs

than before the recession.

92%

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Maine U.S.

This the slowest recovery since the 1930s depression

Maine’s labor force participation rate is at a 29 year low

Labor force participation rate is the share of the population age 16+ working or actively seeking work.

On the other hand, the unemployment rate is lower than the U.S. average

And the share of employed population is higher and has increased faster than the nation in the last five years

How can we have slower job and GDP growth and declining labor force participation, but a better unemployment rate and faster rising, higher share of employed population than the nation? Underlying these trends is different population dynamics and age structure

After consistently rising for generations, the population in Maine has been virtually unchanged the last six years…

This is because the number of births per year is way down and the number of deaths is rising. We no longer have

natural population growth.

8,000

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Bir

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Births

Deaths

And net-migration is down to near zero per year

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Net

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Pri

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Year

Plunging births in the 1990s caused the median age in Maine to surge from close to the U.S. average 25 year ago to the highest in the nation…with NH & VT right behind us.

25

30

35

40

45

1970 1980 1990 2000 2010 2014

Med

ian

Age

MaineNew HampshireVermontFloridaUnited States

Source: U.S. Census Bureau

Birth rates are down throughout the nation, but much more in Maine and northeastern states than other regions... Why?

We now have a very advanced age structure with a high share of population in their 60s, soon to exit the workforce,

and the low share of young people to replace them

Workforce Outlook

Through 2022, the total population is not expected to change, but the number of seniors is expected to rise significantly

while the prime working-age population declines

-60,000

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0

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80,000

16-19 20-24 25-34 35-44 45-54 55-64 65+

Pro

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This is important because labor force participation differs by age. The 25 to 54 age group that has the highest

attachment to the workforce is declining.

20%

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90%

-60,000

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20,000

40,000

60,000

80,000

16-19 20-24 25-34 35-44 45-54 55-64 65+

20

12

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As a result, for the first time we forecast that the size of the labor force will decline through 2022

The labor force peaked in the middle of 2013

475,000

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725,000

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Baby boomers beginning to exit workforce

Baby boomers entering workforce

75%

100%

125%

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175%

200%

225%

250%

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75

19

77

19

79

19

81

19

83

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85

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87

19

89

19

91

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93

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97

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99

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01

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07

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09

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11

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Ind

ex o

f G

DP

in 2

01

3 $

(1

97

5 =

10

0)

United States

Maine

Aging is constraining our growth potential for jobs, GDP, and total income as well. The tightening labor market will create a more competitive landscape for employers to attract staff. This should lead to rising wages – and a very favorable situation for young people.

Industry Job Trends & Outlook

Employment has long been shifting from businesses that produce goods to those that provide services

44% 56%

1950

Goods-Producing

Service-Providing

32%

68%

1975

18%

82%

2000

13%

87%

2022, projected

1953 1983 2013

Total 276 425 602

Manufacturing 115 109 50

Manufacturing Share of Jobs 42% 26% 8%

Lumber 20 13 8

Paper 18 18 7

Textiles 24 7 2

Leather 20 20 2

4 Heritage Mfg Industries 82 59 18

Heritage Share of Jobs 30% 14% 3%

Healthcare ? 35 101

Healthcare Share of Jobs ? 8% 17%

Jobs (in thousands)

Growth is primarily expected in healthcare, professional services, and hospitality, offset by declines in manufacturing and government.

Little net job change is expected in most other sectors.

-4,400

-2,900

-800

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0

200

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500

1,200

2,400

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13,100

Manufacturing

Government

Information

Utilities

Natural Resources & Mining

Financial Activities

Other Services

Transportation & Warehousing

Wholesale Trade

Educational services

Construction

Retail Trade

Leisure & Hospitality

Professional & Business Services

Health Care & Social Assistance

Projected change in jobs by sector, 2012-2022

Occupational Job Trends & Outlook

The occupational structure of employment has shifted away from blue-collar jobs

Blue collar

Mgmt, pro/tech

Office, sales, service

1950 2012

Skill Demands are Changing

• High Skill Occupations – Functions require analytical ability, critical thinking, problem solving, reasoning, and creativity. Most require post-secondary education.

• Middle Skill Occupations – Routine and repetitive tasks that tend to be procedural. Often require on the job or other forms of training.

• Low Skill Occupations – Physical work that cannot be (or has not yet been) automated. Limited educational requirements.

Automation

Growth is expected to continue to be concentrated in occupations that require post-secondary education

that pay well and in low-skill, low-paying occupations

The work attributes valued in growing occupations are very different from those in declining occupations

Examples of knowledge, skill, and ability requirements: Growing Occupations

Critical thinking, problem solving, decision making, mathematics, reading comprehension, deductive reasoning, processing information, analyzing data

Declining Occupations

Machinery operation, equipment inspection, tool selection, physical strength, following instructions, manual dexterity, clerical functions

Veterans

51% 52% 51%

53%

49%

68% 68% 68% 68% 67%

2010 2011 2012 2013 2014

Veterans Nonveterans

Labor force participation of Veterans is lower than for non-Veterans

Though participation of Vets is higher in most age groups. The average is lower because a much larger

share of Vets are retirement age.

85% 84%

60%

19%

79% 82%

68%

17%

18-34 35-54 55-64 65+

Veterans Nonveterans

Unemployment rates continue to trend lower for Vets and non-Vets. Estimates for Vets are based on small

data samples, so there is more variability.

8.7%

7.5%

5.7%

6.6%

5.0%

7.9% 7.7% 7.5%

6.4%

5.5%

2010 2011 2012 2013 2014

Veteran Nonveteran