The “Short” Story of the Texas Labor Market

HSI Workforce Connections Corpus Christi, Texas

March 20, 2003

Richard Froeschle, DirectorCareer Development Resources(CDR)rich@cdr.state.tx.us(512) 491-4941

Economic forecasting is a field that gives

Astrology a good name!

A Changing Texas Labor Market

1. It’s a recession if you don’t have a job, otherwise it’s just a three-year downturn!

2. Economists still very divided on duration, turning point signals, impact of Iraq war, and level of job growth in recovery

What do labor economists agree on?

1. There will be no shortage of opportunities in the knowledge sector for those with the education and intelligence to perform in it

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

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

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, construction…no 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”

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

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

Job Declines in Goods Producing SectorsTexas 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

A Changing Texas Labor Market

3. More jobs in small firms, greater use of leased and independent contract labor means fewer and shorter career ladders

4. Workplace earnings are increasingly correlated with education and earnings inequality is increasing based on education and the “Digital Divide”

Distribution of U.S. Employment by Education Category

Education CategoryEmployment

2000 2010Percent distribution

Jobs Added

Between2000-2010

Mean Annual

Earnings 2000

Bachelors Degree or higher

20.7% 21.8% 29.3% $56,553First Professional Degree 1.4% 1.4% 1.7% $91,424Doctoral Degree

1.0% 1.1% 1.6% $52,146Masters Degree 1.0% 1.0% 1.5% $43,842Bachelors plus work experience 5.0% 5.2% 6.4% $69,967

Bachelors Degree 12.2% 13.0% 18.1%$48,440

Associate Degree 3.5% 4.0% 7.3% $41,488

Postsecondary vocational award

4.6% 4.7% 5.5%

$31,296

Work experience 7.2%8.5%

6.9% 5.0% $40,881Long-term OJT 8.0% 4.2% $33,125

Moderate-term OJT 19.0% 18.4% 14.1% $29,069

Short-term OJT 36.6% 36.3% 34.6% $19,799

A Changing Texas Labor Market

5. Changing demography affects everything from education needs, workplace diversity, tax structure, retirement planning

6. Educational Preparation

7. Globalization is changing economic theory, business practices and labor supply options

Population Pyramids for Anglo and Hispanic Ethnic Groups in Texas, 2000

Male Female Male Female

Anglo Hispanic100 + years

95 to 99 years90 to 94 years85 to 89 years80 to 84 years75 to 79 years70 to 74 years65 to 69 years60 to 64 years55 to 59 years50 to 54 years45 to 49 years40 to 44 years35 to 39 years30 to 34 years25 to 29 years20 to 24 years15 to 19 years10 to 14 years

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Education and Labor Supply

a. Changing demographics-new mix

of diversity in the labor pool

b. Relevance of a college major?

c. College credential vs. industry certification? Value of a

diploma?

d. Counting skill attainment from non-traditional sources, e.g. on-

line courses, employer training,

Marketable skills achievers?

How Globalization Impacts the

Labor Market—The 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

The Workplace of the Future...

The factory of the future has just one man and one dog. The man’s job is to feed the dog. The dog’s job is to keep the man from touching the equipment.