the state of the economy and future workforce considerations

THE STATE THE STATE OF THE OF THE

ECONOMYECONOMYANDAND

FUTURE WORKFORCE FUTURE WORKFORCE CONSIDERATIONSCONSIDERATIONS

March 3, 2011March 3, 2011

Retooling Our Students

for the Future

THE STATE OF THE THE STATE OF THE ECONOMYECONOMY

ANDAND


27th AnnualInformation Technology (IT)

Conference

Dennis K. WintersChief, Office of Economic AdvisorsWisconsin Department of Workforce Development

March 3, 2011




March 3, 2011March 3, 2011


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HOW BAD

WAS IT?

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• Four negative U.S. GDP quarters in a row• Global GDP declined• The U.S. and Japan were in recession at

same time• Personal consumption expenditures were

down 3 out of four quarters, with the one registering just +0.1%

• Longest downturn since Great Depression• Twice as long as post-war average

recession

HOW BAD WAS IT?THINGS THAT NEVER HAPPENED BEFORE

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INDUSTRIAL ACTIVITY PLUNGED U.S. AND ESPECIALLY THE MIDWEST

Source: Chicago Fed, OEA

Manufactuing Production Indexes

30

40

50

60

70

80

90

100

110

120

130

Jan-73 Jan-82 Jan-91 Jan-00 Jan-09

MidwestU.S.

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Total NonFarm Y/Y Job Growth(unadjusted)

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Gro

wth

ove

r 12

Mon

ths

Wisconsin

U.S.

EMPLOYMENT DROPPED PRECIPITIOUSLY JOB LOSSES WORSE THAN 1981 RECESSION

Source: Bureau of Labor Statistics, LMI, OEA

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UNEMPLOYMENT CLIMBED NOT QUITE TO LEVELS OF 1981 RECESSION


Unemployment Rates(seasonally adjusted)

3

4

5

6

7

8

9

10

11

12

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Per

cen

t

Wisconsin

U.S.

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Average Weeks Unemployed

5

10

15

20

25

30

35

Jan 1

948

Jan 1

953

Jan 1

958

Jan 1

963

Jan 1

968

Jan 1

973

Jan 1

978

Jan 1

983

Jan 1

988

Jan 1

993

Jan 1

998

Jan 2

003

Jan 2

008

Source: U.S. Dept. of Labor, Bureau of Labor Statistics and National Bureau of Economic Research

DURATION OF FINDING NEW JOBIS PROTRACTED




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HOW DO YOU SPELL

RECOVERY?

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• GDP

• DJIA

• JOBS

HOW DO YOU SPELLRECOVERY?




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Real GDP Growth

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2000q1 2002q1 2004q1 2006q1 2008q1 2010q1

Per

cen

t

HOW DO YOU SPELL RECOVERY?GDP; Six positive quarters, Q4 up 2.8%

Source: Bureau of Economic Analysis, OEA




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HOW DO YOU SPELL RECOVERY?DJIA; UP 85% SINCE MARCH 9, 2009

Source: http://moneycentral.msn.com/investor/charts/chartdl.aspx




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MANAGING RISK WHERE IS THE INCENTIVE TO EXPAND

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HOW DO YOU SPELL RECOVERY?JOBS; STILL DOWN 150,000


Wisconsin Total Nonfarm Jobs (NSA)

2,600,000

2,650,000

2,700,000

2,750,000

2,800,000

2,850,000

2,900,000

2,950,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

200720092010

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JOB RECOVERY WILL TAKE TIME

Source: BLS, OEA

Job Losses in Recent Recessions - Wisconsin - # of Months Since Recession Declaration

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61

Source: DWD, OEA, X12 adjustment of not seasonal ly adjusted CES via U.S. BLS

Job

Loss

es R

elativ

e to

Peak

Mon

th

1981 Recession1990 Recession2001 Recession2007-2009 Recesion




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YES VIRGINIA,WE ARE

IN RECOVERY

MODE




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BUSINESS CYCLE SEVERESIX QUARTERS TO RECOVER


Gross Domestic Product

$12,700

$12,800

$12,900

$13,000

$13,100

$13,200

$13,300

$13,400

$13,500

2007-

III

2007-

IV

2008-

I

2008-

II

2008-

III

2008-

IV

2009-

I

2009-

II

2009-

III

2009-

IV

2010-

I

2010-

II

2010-

III

2010-

IV

Bill

ions

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Industry Indexes

30.0

35.0

40.0

45.0

50.0

55.0

60.0

65.0

70.0

Jul-9

7

Jul-9

8

Jul-9

9

Jul-0

0

Jul-0

1

Jul-0

2

Jul-0

3

Jul-0

4

Jul-0

5

Jul-0

6

Jul-0

7

Jul-0

8

Jul-0

9

Jul-1

0

Jul-1

1

Non-Manufacturing

Manufacturing

BOTH MAJOR SECTORS RECOVERING MANUFACTURING AND NON-MANUFACTURING

Source: St. Louis Fed, OEA




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INVESTMENT GROWTH IS IN PRODUCTIVITY, NOT EXPANSION


Private Domestic Investment

-$500

$0

$500

$1,000

$1,500

$2,000

$2,500

200

6-I

200

6-II

200

6-III

200

6-IV

200

7-I

200

7-II

200

7-III

200

7-IV

200

8-I

200

8-II

200

8-III

200

8-IV

200

9-I

200

9-II

200

9-III

200

9-IV

201

0-I

201

0-II

201

0-III

201

0-IV

Bill

ion

s

Gross private domestic investment Nonresidential Equipment and softw are Structures ResidentialPrivate Inventories

19




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UTILIZATION CAPACITY STILL SOME SLACK IN SYSTEM

20




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IN CONCLUSIONCONTINUED RECOVERY

Self-sustaining recovery Employment breach in 2014? Strength of recovery subject to consumer

income and wealth uncertainty

Risks Financial workouts put too much strain on

economy. European Union fiscal problems wash over

the global financial markets. High unemployment saps consumption.

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So, what will be the biggest social policy

challenge in the next 20 years?

22




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ELDERLY NUMBERS WILL SWELLWIDEN THE SIDEWALKS WILL YA !?




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QUANTITY

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WISCONSIN’S WORKFORCE GROWTHBECOMES FLAT

Source: Bureau of Labor Statistics, OEA

Wisconsin Population and Labor Force

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1960 1970 1980 1990 2000 2010 2020 2030

( x 1

000

)

POPULATION

CIVILIAN LABOR FORCE

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BLS RAISED LFPR FOR THE FUTUREPARTICULARLY FOR OLDER COHORTS

Source: Bureau of Labor Statistics, Bureau of the Census, OEA

Changes in LFPR by Age Cohort

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

16-19 20-24 25-34 35-44 45-54 55-59 60-64 65-69 70-74 75+

Constant2000201020202030

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WISCONSIN’S WORKFORCE HIGHER LFPRs OFFER LIMITED GAINS

Source: Bureau of Labor Statistics, OEA

Worker Difference from Census 2000

(20,000)

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2010 2010 2020 2020 2030 2030

New BLS Plus 3% New BLS Plus 3% New BLS Plus 3%

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LITTLE CHANGES EVEN WITH HIGHER LFPRRETIREMENTS SWAMP PARTICIPATION

Source: Bureau of the Census, DOA, OEA

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1960 1970 1980 1990 2000 2010 2020 2030

PopulationLabor force base caseBLS prj. changeElevated LFPR of 3 percentage points

Wisconsin Population and Labor Force




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QUALITY

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THIS IS NOT YOUR FATHER’S ECONOMYIN FACT, THAT WAS AN ABERRATION

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"The days are over when you could walk into a paper mill with a high school diploma and run one of the machines."

– Patrick Schillinger, former Wisconsin Paper Council President, Center will teach paper-industry technology, Milwaukee Journal Sentinel, JS Online, October 21, 2004.

FUTURE EMPLOYEESREQUIRE HIGHER SKILLS

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Entry level jobs with family supporting wages and advancement opportunities require same knowledge foundation and skill set as those entering post-secondary education.

• Advanced reading

• Advanced writing

• Advanced mathematics (Algebra II)

Fastest growing occupations earning greater than $30,000 per year, require somepost-secondary education.

EQUAL SKILLS NOW REQUIREDNO TWO-TRACKING

Source: Achieve, Inc, OEA.

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“Today in most fields I know, the struggle is about creativity and innovation. There is no script.”

– Robert B. Shapiro, former CEO & Chairman, Monsanto Corporation

FUTURE EMPLOYERSNEED FOR CREATIVITY & INNOVATION

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Source: Autor, Levy and Murnane, 2003

Nonroutine manual

Routine cognitive

Routine manual

Nonroutine analytic.

Nonroutine interactive

WORKPLACE REQUIREMENTSCHANGES IN SKILLS USED AT WORK*

Source: K-12 Education and Economic Summit presentation by Alan B. Krueger, Princeton University

* Based on the Dictionary of Occupational Titles




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JOB PROSPECTS




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“I’m worried about job security and I don’t even have a job yet.”

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JOB OPENINGS BY OCCUPATIONAL GROUPWISCONSIN, 2008-2018

208,970

171,410

99,380

93,850

75,440

66,520

51,110

24,000

23,060

1,370Farming, Fishing, & Forestry

Installation, Maintenance, & Repair

Construction & Extraction

Transportation & Material Moving

Production

Management, Business, & Financial

Sales & Related

Office & Administrative Support

Professional & Related

Service

New Jobs

Replacements

Source: Office of Economic Advisors, Wisconsin Projections 2008-2018

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TOP OCCUPATIONS WITH MOST NEW JOBS WISCONSIN, 2008-2018

Source: Office of Economic Advisors, Wisconsin Projections 2008-2018

Registered Nurses 19.4% 10,570 Associate or Bachelor's degree $63,187

Home Health Aides 38.3% 7,940 Short-term on-the-job training $21,910

Personal & Home Care Aides 34.0% 7,380 Short-term on-the-job training $20,297

Combined Food Preparation & Serving Workers 11.3% 7,260 Short-term on-the-job training $17,371

Customer Service Representatives 12.1% 5,960 Moderate-term on-the-job training $32,996

Nursing Aides, Orderlies, & Attendants 13.8% 5,090 Postsecondary vocational training $25,769

Accountants & Auditors 15.2% 3,500 Bachelor's degree $61,069

Truck Drivers, Heavy & Tractor-Trailer 6.9% 3,450 Short-term on-the-job training $39,813

Network Systems & Data Communications Analysts 36.9% 2,900 Bachelor's degree $64,364

Office Clerks, General 3.8% 2,590 Short-term on-the-job training $28,109

Waiters & Waitresses 5.1% 2,410 Short-term on-the-job training $18,892

Landscaping & Groundskeeping Workers 10.5% 2,290 Short-term on-the-job training $26,505

Medical Assistants 21.3% 2,100 Moderate-term on-the-job training $30,313

Computer Software Engineers, Applications 18.2% 1,820 Bachelor's degree $75,752

Recreation Workers 11.8% 1,560 Moderate-term on-the-job training $23,664

Occupational TitleAvg. Ann.

Salary, 2009Growth Rate,

2008-18New Jobs,

2008-18Typical Education & Training

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FASTEST GROWING OCCUPATIONS WISCONSIN, 2008-2018

Note: Only occupations with at least 500 jobs in 2018 were included.Source: Office of Economic Advisors, Wisconsin Projections 2008-2018

Home Health Aides 38.3% 10,000 Short-term on-the-job training $21,910

Network Systems & Data Comm. Analysts 36.9% 4,310 Bachelor's degree $64,364

Personal & Home Care Aides 34.0% 10,090 Short-term on-the-job training $20,297

Financial Examiners 32.6% 220 Bachelor's degree $68,521

Ambulance Drivers & Attendants 30.8% 260 Moderate-term on-the-job training $22,468

Athletic Trainers 28.3% 270 Bachelor's degree $43,813

Physician Assistants 27.1% 760 Master's degree $87,608

Surgical Technologists 25.0% 1,340 Postsecondary vocational training $44,801

Medical Equipment Repairers 24.5% 650 Associate degree $49,492

Physical Therapist Aides 24.4% 420 Short-term on-the-job training $24,790

Mental Health Counselors 24.1% 830 Master's degree $44,180

Cardiovascular Technologists & Technicians 24.0% 370 Associate degree $52,769

Animal Trainers 23.9% 260 Moderate-term on-the-job training $30,942

Gaming Dealers 23.1% 600 Postsecondary vocational training $19,532

Medical Scientists, Excl. Epidemiologists 22.6% 1,240 Doctoral degree $56,810

Avg. Ann. Salary, 2009

Typical Education & TrainingOccupational TitleGrowth Rate,

2008-18Total Openings,

2008-18

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MOST “IN DEMAND” OCCUPATIONS WISCONSIN, 2008-2018

Note: Occupations most “in demand” satisfy the following criteria:1. Annual growth rate is above the statewide average of 0.27% between 2008 and 20182. Annual median wage is higher than the State’s median wage for all jobs ($32,351) 3. Top 30 total job openings (openings due to either new jobs or replacement needs) Among top 100 fastest growing occupations Among top 100 occupations with the most new jobs between 2008 and 2018 Among top 100 highest-paid occupationsSource: Office of Economic Advisors, Wisconsin Projections 2008-2018

Registered Nurses 1.9% 2,010 Associate or Bachelor's degree $63,187

Truck Drivers, Heavy & Tractor-Trailer 0.7% 1,240 Short-term on-the-job training $39,813

Elementary School Teachers 0.4% 870 Bachelor's degree $51,236

Accountants & Auditors 1.5% 740 Bachelor's degree $61,069

Licensed Practical & Vocational Nurses 1.4% 490 Postsecondary vocational training $41,079

Network Systems & Data Comm. Analysts 3.7% 430 Bachelor's degree $64,364

Executive Secretaries & Assistants 0.3% 400 Work experience $38,763

Middle School Teachers 0.4% 380 Bachelor's degree $50,952

Police & Sheriff's Patrol Officers 0.4% 360 Long-term on-the-job training $52,128

Computer Systems Analysts 0.9% 310 Bachelor's degree $70,263

Social & Community Service Managers 1.0% 310 Bachelor's degree $56,516

Postal Service Mail Carriers 1.1% 310 Short-term on-the-job training $46,836

Administrative Services Managers 0.8% 280 Bachelor's or higher + experience $71,212

Computer Software Engineers, Applications 1.8% 270 Bachelor's degree $75,752

Employment & Placement Specialists 1.9% 250 Bachelor's degree $51,116

RankOccupational Title Typical Education & TrainingAnnual

Growth RateAnnual Job Openings

Avg. Ann. Salary

40




March 3, 2011March 3, 2011


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Occupational Title % ChangeAverage Annual

Openings

Typical Education and Training Path

Avg Ann Salary

Total, all occupations 2.7% 78,570 $ 40,193

Network systems and data communications analysts

36.9% 430 Bachelor's degree $ 64,364

Computer systems analysts 9.3% 310 Bachelor's degree $ 70,263

Computer software engineers, applications 18.2% 270 Bachelor's degree $ 75,752

Computer support specialists - 1.3% 250 Associate degree $ 43,630

Billing and posting clerks and machine operators

5.3% 210 Short-term on-the-job training $ 32,654

Computer programmers - 14.2% 150 Bachelor's degree $ 66,495

Network and computer systems administrators 7.1% 150 Bachelor's degree $ 59,676

Computer and information systems managers 7.1% 140 Bachelor's or higher degree,

plus work experience $ 99,895

Data entry keyers - 13.7% 110 Moderate-term on-the-job

training $ 25,889

Electrical and electronic equipment assemblers - 10.0% 110 Short-term on-the-job training $ 30,609

Electrical power-line installers and repairers 5.5% 100 Long-term on-the-job training $ 58,013

IT OCCUPATIONS WITH THE MOST OPENINGSWISCONSIN, 2008-2018

Typical Education and Training Path gives a general indication of the education or training typically needed in the occupation.There may be other pathways into the occupation, as well as additional educational, training, or licensing requirements.

41




March 3, 2011March 3, 2011


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FASTEST GROWING IT OCCUPATIONS WISCONSIN, 2008-2018

Occupational Title % ChangeAverage Annual

Openings

Typical Education and Training Path

Avg Ann Salary

Total, all occupations 2.7% 78,570 $ 40,193

Network systems and data communications analysts


Computer software engineers, applications 18.2% 270 Bachelor's degree $ 75,752

Computer software engineers, systems software


Computer and information scientists, research 13.0% 0 Doctoral degree $ 123,215

Computer systems analysts 9.3% 310 Bachelor's degree $ 70,263

Telephone operators 7.6% 0 Short-term on-the-job training $ 26,961

Computer and information systems managers 7.1% 140 Bachelor's or higher degree,

plus work experience $ 99,895

Network and computer systems administrators 7.1% 150 Bachelor's degree $ 59,676

Database administrators 6.9% 40 Bachelor's degree $ 66,957

Computer specialists, all other 6.7% 40 Associate degree $ 61,219

Electrical power-line installers and repairers 5.5% 100 Long-term on-the-job training $ 58,013

Billing and posting clerks and machine operators

5.3% 210 Short-term on-the-job training $ 32,654

Telecommunications equipment installers and repairers, except line installers

1.4% 70 Postsecondary vocational

training $ 48,201

Electronics engineers, except computer 0.3% 40 Bachelor's degree $ 78,259

42




March 3, 2011March 3, 2011


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Industry Title Employment

Educational services 1,427

Professional, scientific, and technical services 1,180

Management of companies and enterprises 705

Insurance carriers and related activities 563

Publishing industries (except internet) 530

Administrative and support services 497

Merchant wholesalers, durable goods 490

Telecommunications 429

Unclassified 284

Hospitals 241

Credit intermediation and related activities 240

Electronics and appliance stores 196

Machinery manufacturing 193

Ambulatory health care services 165

Internet and data processing services 130

INDUSTRIES WITH THE GREATEST NUMBER OF COMPUTER SUPPORT SPECIALISTS

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March 3, 2011March 3, 2011


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WORKFORCE TRENDSARE:

Unprecedented – we have never faced a declining workforce before;

Assured – demographics will change little;

Largely unalterable – demographics and migration patterns do not change abruptly.

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March 3, 2011March 3, 2011


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RAMIFICATIONS OF WORKFORCE TRENDSARE:

Potentially devastating – without sufficient productivity gains the state’s economy will stagnate;

Necessitating a focus on talent – large investments in education and training are needed;

Requiring match – talent supply and industry demand must be matched or you lose both.




March 3, 2011March 3, 2011


for the Future

46




March 3, 2011March 3, 2011


for the Future

QUESTIONS?

47




March 3, 2011March 3, 2011


for the Future

Dennis Winters

Phone: 608-267-3262

Email: [email protected]

Website: www.dwd.wisconsin.gov

OEA website: www.dwd.wisconsin.gov/oea

CONTACT INFORMATION

the state of the economy and future workforce considerations

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