The Changing Face of the Texas Labor Market

for Panhandle Twenty/20January 30, 2007

Richard Froeschle rich@cdr.state.tx.usTexas Workforce Commission/LMCI(512) 491-4941www.twc.state.tx.us/realitycheckwww.tracer2.comwww.texaswages.com

The Statistics Never Lie…!!!

• 700,000 Physicians in the U.S.

• 98,000 Accidental Deaths caused by Physicians

• 0.14 Accidental Deaths per Physician

• 65 million Gun Owners in the U.S

• 29,789 Accidental Gun Deaths

• .000458 Accidental Deaths per Gun Owner

How is the Economy Performing? It Depends on Your Personal Perspective!

It’s doing well if….

• Employed w/ marketable & transferable skills

• Health Care, esp. Nursing• Medical/Drs. Assistants• Therapists &Therapy Aides• Network Systems Analysts• Residential Care Facilities• Airline or other Security• Teaching, all levels• Home Health Aides

It’s not doing well if…

• Unemp w/Undefined skills• Repetitive, Rules-based Jobs

• Cut & Sew Apparel Sector• Small Farmer/Rancher• Telemarketer/Travel Agent• Electronics & Production

Assembler• Order or File Clerk• Grocery or Check-in Clerk• Meter Readers

Major U.S. Demographic Trends Affecting the Texas Labor Market

• Aging of the Population (Baby Boomers hit age 62 in 2008)

• Change in Growth Rates and Sources of Population (slower, more immigration)

• Increase in the Non-Anglo Population (influence of increased cultural diversity)

• Change in Household Composition (smaller households, fewer “traditional” families)

• Population Migration South and West• Demographic Transition Theory and Evolving

Rectangular Population Pyramids

World Population Pyramids 2004 & Organizational Behavior

Less Developed Country Demographics

Developed Country Demographics

Lower fertility & lower mortality

U.S. Population Pyramids 2003U.S. Native Population U.S. Immigrant Population

Percent of Total Population Percent of Total Population

As the Workplace Mirrors a More Rectangular Demographic Pyramid…

1. Managers using pyramidal (rather than collaborative) techniques will be increasingly ineffective.

a. Organizations will seem to flatten on their own.

b. Systems that depend on a pyramid structure will begin to breakdown because 1) insufficient #s of line staff, 2) need for managers to serve dual purpose roles including technical

c. Seniority decreases in importance. Older people may not understand why & may feel cheated of their entitlements.

d. Hiring will take place at all levels of an organization, not just low-level ports of entry

John Sumser, Interbiznet

Typical Behaviors with a Rectangular Population Pyramid (continued)

2. Increased need to manage age, race and cultural diversity

a. Even though the average age of the population constantly increases, age-based entitlements (retirement, pensions, respect) decline.

b. Tolerance is engaged & tested as we learn to utilize different kinds of people. Diversity is an adaptive approach.

c. Rethinking the utility of different kinds of people (differing ages & ethnicity) is hard. Old stereotypes resist change.

d. Lifelong learning will become a virtue.e. Immigration is necessary to maintain the status quo, but

there will be temptations to blame immigrants for the problems.

Occupations with 50% of Workforce over Age 45 AND Replacement Need of

50K Plus• High School Teachers• Telephone Repairers• Insurance Salespersons• College Faculty• Elementary Teachers• Supervisor, Mechanic• Electronic Assemblers• Construction

Supervisor• Maids & Housekeepers• Operations Researchers

• Industrial Machinery Repair

• Financial Managers• Machinists• Licensed Practical Nurses• Registered Nurses• Production Inspectors• General Office Supervisors• Civil Engineers• Postal Mail Carriers• Government Administrator

Percent of U.S. Workers 2004 in Selected Occupations Who Are Unauthorized Migrants

Occupation % Occupation %

Drywall/ceiling tile installers... 27% Cement masons & finishers 22%Roofers 21% Construsction laborers 20%Painters, construction etc. 20% Brick/block/stone masons 19%Carpenters 12%

Grounds maint. workers 26% Misc. agricultural workers 23%Hand packers & packagers 22% Graders & sorters, ag. prod. 22%

Butchers/meat, poultry wrkrs 25% Dishwashers 24%Cooks 18% Dining & cafeteria attendants 14%Food prep. workers 13% Janitors & bldg. cleaners 12%

Maids & housekeepers 22% Sewing machine operators 18%

Cleaning/washing equip. oper 20% Packaging/filling mach. oper. 17%Metal/plastic workers, other 13%

Source: Jeffrey S. Passel, “Unauthorized Migrants: Numbers and Characteristics.” 2005.Background Briefing Prepared for Task Force on Immigration and America’s Future.Washington D.C.: Pew Hispanic Center

Adjusting to Impending Labor Shortages

1. Skilled labor shortages already exist in many occupational fields e.g. health care

2. Skilled & general labor shortages are predicted beginning in 2008 with baby boomer retirement

3. Companies are investigating viable alternative labor options to continue to produce product and maintain sales and profits in the face of labor shortages

4. Outsourcing, visas & direct foreign investment abroad are 3 responses to deal with skilled labor shortages

Texas Industry Employment Job Growth 2003-06 1. Employment Services 57,161 2. Elementary & Secondary Education 38,157 3. Fast Food Restaurants 32,562 4. Home Health Care Services 30,184 5. Oil Well Drilling Support Activities 27,163 6. Full-service Restaurants 25,060 7. Local Government 18,344 8. Warehousing & Storage 15,264 9. Mgmt. & Technical Consulting Services 14,45910. Offices of Physicians 13,92711. Misc. Single Line Gen. Merchandise Stores 13,716 12. Arch, Engineer, Testing Lab Services 13,583

Texas Industry Forecasts from 2005 to 2008 (prelim)

NAICS Industry Net GrowthPct. Growth

1. Administrative & Support Services 75,268 14.1%

2. Educational Services (Public/Private) 74,945 7.4%

3. Food Services & Drinking Places 59,075 8.5%

4. Ambulatory Health Care Services 48,468 10.7%

5. Prof., Scientific & Technical Services 48,454 10.2%

6. Merchant Wholesalers, durable goods 23,704 9.2%

7. Credit Intermediation & Related Services 21,131 9.7%

8. Hospitals (public/private) 19,569 5.8%

9. General Merchandise Stores 18,160 7.6%

10. Local Government (ex. Educ., Health) 17,545 5.5%

11. Support Activities for Mining 16,199 20.8%

12. Specialty Trade Contractors 15,148 4.9%

13. Fabricated Metal Product Manufacturing 14,162 12.9%

Texas Industry Forecasts from 2005 to 2008 (prelim)

NAICS Industry Net GrowthPct. Growth

1. Other Information Services (Archives, News Syndicates) 573 22.2%

2. Support Activities for Mining 16,199 20.8%

3. Internet Publishing & Broadcasting 158 14.7%

4. Warehousing & Storage 5,202 14.2%

5. Administrative & Support Services 75,268 14.1%

6. Lessors of Nonfinancial Assets (franchises, patents) 265 14.0%

7. Fabricated Metal Product Manufacturing 14,162 12.9%

8. Waste Mangmnt & Remediation Services 2,838 12.6%

9. Wholesale Electronic Brokers/Agents 4,738 11.8%

10. State Government (ex. Educ. & Health) 12,881 11.7%

11. Machinery Manufacturing (construction, farm, O&G) 8,543 11.0%

12. Building Materials Dealers/Suppliers 9,142 10.9%

13. Ambulatory Health Care Services 48,468 10.7%

Panhandle Sector-based Employment 2004 to 2006 Industry Sector (18) 2004 2006 04-06

Business & Financial Services 14,289 15,798 1,509

Energy, Mining & Related 4,653 5,649 996

Heavy & Special Trade Construction 7,768 8,558 790

Agriculture, Forestry & Food 12,498 13,286 788

General Line Retailers 12,168 12,616 448

Prod. Support & Industrial Machines 2,947 3,369 422

Corporate HQ & Government 12,590 12,941 351

Logistics, Distribution & Transportation 3,892 4,205 313

Transportation Equipment 4,726 4,979 253

Biotech, Life Sciences & Medical 10,614 10,811 197

Legal, Protective & Human Services 3,517 3,572 55

Petroleum Refining & Chemicals 3,901 3,921 20

Apparel, Leather &Wood Non-durables 1,136 1,139 3

“”The world has arrived at a rare strategic inflection point where nearly half its

population—living in China, India and Russia—have been integrated into the global market economy, many of them highly educated workers, who can do just about any job in the world. We’re

talking about three billion people.

Craig Barrett, CEO Intel 01/08/2004

Why Are U.S Companies Investing Overseas?

1. Establishing a presence overseas to gain greater access to emerging markets

2. Operating in low-wage countries allows U.S. firms to align their cost structures with global competitors

Duke University Survey: What drives offshoring?• 93% strongly agree that Reducing Costs is the

number one reason for offshoring.• 69% agree Competitive Pressures• 55% say Service Quality• 54% say Access to Qualified Personnel

Emerging Markets in a Global Economy:

Percent of 2000 & 2004 Revenue Outside U.S.

YUM Brands 34.5% (36.04%)

Gen Motors 26.2% (27.9%)

Ford 30.4% (41.6%)

Boeing 34.3% (30.5%)

Intel 58.8% (80.8%)

Coca Cola 61.0% (69.7%)

Corning (n/a) (65.3%)

Emerson Electric 40% (47%)

Sara Lee (n/a) (44.1%)

Intnl Paper 22.1% (27.8%)

IBM 57.9% (63%)

Motorola 52.5% (40.3%)

JNJ 38.2% (41.4%)

John Deere 25.1% (29.1%)

Colgate 69.4% (73.7%)

Nike 50.3% (61.0%)

Campbell Soup n/a (35.6%)

Globalization is Working Both Ways…

Competition & Leakages Affect Job Creation…

“There is no job that is America’s God-given right anymore. Our competitiveness as a nation is not inevitable.” Carly Fiorina

More than half of the revenue from U.S. information technology companies comes from abroad. That $$$ helped finance $56.5 billion of spending on research and development, mostly in the U.S., providing work for scientists and engineers.

“It is unrealistic to think that 100% of our employees would be in the U.S. when 70% of our revenues are from outside the U.S.”

U.S. Tech Executives

Globalization Means Emerging Consumer Markets

Isn’t There a Machine That Can Do This?

Productivity: More Output with Fewer Workers (US 2002-2012) Output--

Employ• Total All Industries 3.3% 1.5%• Manufacturing 3.4% -.1%• Industrial Machinery 4.4% -.5%• Computer Products Manufacture 11.8% -1.3%• Communications Equipment 10.4% .5%• Medical Equipment 5.2% .6%• Retail Trade 3.4% 1.3%• Air Transportation 4.9% .7%• Internet Services 10.3% 3.9%• Computer Systems Design 9.0% 4.5%• Ambulatory Health Care 3.8% 3.5%• State & Local Government 1.6% 1.3%• Professional Services 4.5% 2.5%

New Technologies Create New Consumer Products which Affect:

• Creation of New Consumer Markets and Corporate Revenue Streams

• New Mix of Industry Composition, Firm Mix, Market Leaders

• New or Evolving Mix of Occupational Skills, Employer Hiring Requirements & Workforce Preparation Issues

• Blended or Merged Occupations• New Mix of Global Production Markets and

Intermediate Suppliers But what is the employment impact of

any given new Technology??

Segway™, Cell Phones, iPOD™ New Products: Better Life or Real Job Impacts?

Self-service Kiosks, Carbon Nanotubes, Robotics, Inventory Control Technologies

Projection Keyboard & ProjectorProjection Keyboard & Projector

Translation GogglesTranslation Goggles

Fastest Growing Texas Occupations 2012

Occupation TitleEducation

Annual Pay

Medical Assistants HS/SC $21,714

Medical Records Technicians HS/SC $24,685

Physician Assistants SC/C $77,378

Physical Therapy Aides SC/C $23,816

Special Education Teachers C $42,986

Physical Therapy Assistants SC/C $40,855

Respiratory Therapy Technicians HS/SC $34,420

Home Health Care Aides HS/SC $13,477

Respiratory Therapists SC/C $41,632

Environmental Science Technicians SC/C $36,935

Texas Occupations with Most Jobs 2012

Occupation TitleEducation Pay Label

Fast Food Prep Workers HS $14,033

Retail Salespersons HS/SC/C $21,970

Registered Nurses SC/C $52,665

Waiters & Waitresses HS/SC $14,994

Personal & Home Health Aides HS/SC $13,477

Customer Service Representatives HS/SC/C $26,328

Elementary School Teachers C $41,775

Cashiers HS/SC $16,049

Janitors & Cleaners HS $16,759

Teachers Assistants HS/SC $16,773

Nursing Aides & Orderlies HS/SC $18,322

Growing Gap Between Well-educated & Marginally Educated (real median weekly earnings)

300

400

500

600

700

800

900

1000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

BA degree & higher$/week

Some college, Associate degree

High school diploma, no college

Less than high school diploma

Highest Paying Majors 1 Year Post-Graduation:Bachelors & Associates Degrees Only

College MajorExit Level

Annual Pay

1. Health Professions/Clinical Sciences BA $47,306

2. Engineering BA $45,278

3. Health Professions/Clinical Sciences AAS $44,230

4. Construction Trades AAS $40,120

5. Engineering Technologies/Technicians BA $39,677

6. Science Technologies/ Technicians AAS $37,968

7. Architectural & Related Services AAS $36,737

8. Precision Production AAS $34,167

9. Computer & Information Sciences BA $33,276

10. Business, Mgmt. & Marketing BA $30,851

11. Mathematics & Statistics BA $30,160

15. Liberal Arts BA $27,415

**Avg. earnings for entire graduating cohort, not for individual graduates

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?

I. There will be no shortage of opportunities in the knowledge sector for those with the education and intelligence to perform in it. “Thinkers” and other creative, innovative people will be in demand.

II. All jobs, even the most low-skilled, will require higher levels of basic education, math, communication and technology skills…for survival and growth

III. Those without some specialized knowledge or skill are likely to suffer declining real wages

What do labor economists agree on? (II)

IV. The Digital Divide exists and those on the wrong side will have limited hiring and advancement opportunities,

V. Jobs requiring “human touch” will continue to be in demand e.g. health services and nursing, auto mechanics, construction…no robot plumbers!

VI. Workplace settings and business practices and knowledges will change rapidly, making lifelong learning essential e.g. productivity is King…doing it better, producing more with fewer workers e.g. life after “paving the cow path”

There is much more to tell, but this story is over!

Thank you

Student Career Interests30,868 Inquiries January 2004-January 2006

1. Doctor, all specialties (2,064)

2. Lawyer (1,816)

3. Teacher K-12 (1,744)

4. Athletes & Coaches (1,238)

5. Law enforcement (1,193)

6. Registered Nurses (1,100)

7. Veterinarians (1,093)

8. Singers/Entertainers (827)

9. Cosmetology/Hairdresser(759)

10. Actors & Directors (506)

11. Architects

12. Biological scientist

13. Auto mechanics

14. Photographers

15. Designers

16. Computer programmer

17. Fire fighters

18. Computer engineers

19. Artists

20. Psychologists

Education3M

Stability is dead; “education” must therefore

“educate” for an unknowable, ambiguous, changing future; thence,

learning to learn & adapt is far more important than

mastery of a static body of “facts.”

The Internet is viewed by today’s youth as an extension of their brain!