The Changing Face of the Texas Labor Market

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The Changing Face of the Texas Labor Market

• TWC Quarterly Workforce Forum
• Omni Southpark Hotel in Austin, Texas
• April 9, 2003
• Richard Froeschle, Director
• Career Development Resources(CDR)
• rich_at_cdr.state.tx.us
• [phone]

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Economic forecasting is a field that gives
Astrology a good name!
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A Changing Texas Labor Market

• 1. If its not a recession, its 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

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Harry Truman is purported to have said,

• All my economists say, on the one, or on the
  other handwhat I really need is a one-handed
  economist.

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Job Growth and the Economy

• Overall job growth not occurring
• Manufacturing jobs hard hit
• High energy prices hit production costs
• Low stock prices lead to cost containment
• War uncertainty temper expansion plans
• War terrorism affect some industries
  moreairlines, travel/lodging/retail
• Government leading growth engine

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What do labor economists agree on?

• There will be no shortage of opportunities in the
  knowledge sector for those with the education and
  intelligence to perform in it
• All jobs, even the most low-skilled, will require
  higher levels of basic education, math,
  communication and technology skillsfor survival
  and growth
• 3. Those without some specialized knowledge or
  skill are likely to suffer declining real wages

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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,
  constructionno 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

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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?

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Fewer Jobs in Goods Producing Sectors
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Airlines, Oil Gas, Computer and Accounting
Services Shedding Jobs
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Education, Health Govt. Buoy Economy
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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

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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

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Job Declines in Goods Producing Sectors

• Texas 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

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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

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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

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More OutputNot 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

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Technology Meets Apparel Manufacturing
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Technology Meets Barbeque
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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 dont need training

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Texas Employment Distribution by Firm Size First
Quarter 2001
Firm Of Firms Statewide Of Workers
Statewide Size No. Percent No.
Percent 0-4 243,788 55.3 462,175
5.0 5-9 77,816 17.7 520,016 5.6 10-19
52,239 11.9 723,532 7.7 20-49 38,203
8.7 1,203,531 12.9 50-99
14,554 3.3 1,040,977
11.1 100-249 8,820 2.0
1,396,492 15.0 250-499 2,826 0.6
992,058 10.6 500-999 1,242 0.3
891,835 9.6 1,000 plus 843 0.2
2,106,265 22.6 Total 440,331
100.0 9,336,881 100.0
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Pattern of Change 1989-2001 Texas Employment
Percentages by Firm Size
Firm Pct of Workers
Trend Size 1989 1992 1996
2001 0-4 4.92 5.78 5.16
5.0 SMALL INCREASE 5-9 5.68 7.02
5.97 5.6 SLIGHT DECLINE 10-19
6.92 9.12 8.01 7.7 INCREASE 20-49
10.26 14.52 13.11 12.9 INCREASE 50-99
8.34 11.62 10.91 11.1 BIG
INCREASE 100-249 11.52 14.64 14.56 15.0
BIG INCREASE 250-499 9.24 9.04 9.77
10.6 INCREASE 500-999 9.02 7.87 9.53
9.6 SMALL INCREASE 1000 34.10 20.48
22.98 22.6 MAJOR DECLINE
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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

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Changing Nature of WorkNew Paradigm for Career
Ladders

• 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

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Lifetime Earnings by Education Level in Texas
Education Level Estimated Estimated Texas
2000 Lifetime
Hourly Work Life Hours Earnings
Earnings Short-term training 83,200
8.26 687,232 Moderate-term training 83,200 11
.32 941,824 Long-term OJT 83,200 12.12
1,008,384 Work Experience 83,200 15.85
1,318,720 Post-sec Vocational
Award 83,200 13.30 1,106,560 Associate
s Degree 83,200 17.72
1,474,304 Bachelors Degree 83,200 19.74
1,642,368 Bachelors Experience 83,200 24
.82 2,065,024 Masters
Degree 83,200 18.51
1,540,032 Doctoral Degree 83,200 19.53
1,624,896 First Professional Degree
83,200 35.61 2,962,752
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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

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Global Labor Market of the 21st Century

• Creative destructionThe process of simultaneous
  job creation and job destruction as new skill
  sets are required and old skills become outdated.
  The same employers will be both hiring and laying
  off continually regardless of labor market
  conditions to enhance productivity and
  competitive edge.
• Joseph Schumpeter

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How Globalization Impacts the Labor MarketThe
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

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Population Pyramids for Anglo and Hispanic
Ethnic Groups in Texas, 2000
Anglo
Hispanic
Male Female
Male Female
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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 Bachelors degree.

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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.

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Projected Fastest Growing OccupationsBLS
National 2000-2010

• Fastest Growing
• Computer Software Engineers Applications
• Computer Support Specialists
• Computer Software Engineers Systems
• Network Administrators
• Systems Communication Analyst
• Desktop Publishers
• Database Administrators
• Personal Home Care Aides
• Computer Systems Analysts
• Medical Assistants

• Adding Most Jobs
• Fast food Prep Wrkers
• Customer Service Reps
• Registered Nurses
• Retail Sales Workers
• Computer Support Specialists
• Cashiers, ex. Gaming
• General Office Clerks
• Security Guards
• Software Applications Engineers
• Waiter/Waitress

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Occupational Growth in Texas Fastest Growing
2000-2010

• 8. Database Administrators
• 9. Medical Records Technician
• 10. Social Services Assistants
• 11. Special Education Teachers
• 12. Computer Systems Analysts
• 13. Medical Assistants
• 14. Physician Assistants
• 15. Information Systems Mgrs.

• 1. Computer Support Specialists
• 2. Computer Software Engineers, Apps
• 3. Network Systems Administrators
• 4. Desktop Publishers
• 5. Computer Software Engineers, Systems
• 6. Network Data Communications Analysts
• 7. Computer Specialist, NEC

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Occupational Growth in Texas Most Jobs Created
2000-2010

• 1. Customer Service Representatives
• 2. Food Prep and Serving Workers, Fast Food
• 3. Child Care Workers
• 4. Retail Salespersons
• 5. Registered Nurses
• 6. Cashiers
• 7. Computer Support Specialists
• 8. 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

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A Changing Texas Labor Market (8)

• 12. All education and workforce development is
  part of economic development. Industry Clusters
  and regional targeting must emphasize regional
  collaboration.
• 13. The economic future of the region will depend
  on understanding the market factors faced by the
  employer community and how you shape policies to
  take advantage of that environment

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The Secret is in Collaboration!