BAHEP Education and Workforce Development Meeting
Gulf Coast Workforce Board www.wrksolutions.com 1.888.469.JOBS (5627) Workforce Solutions is an equal opportunity employer/program. Auxiliary aids and services are available upon request to individuals with disabilities. (Please request reasonable accommodations a minimum of two business days in advance.) Relay Texas: 1.800.735.2989 (TDD) 1.800.735.2988 (voice) or 711
PART I:
Current State of Houston’s Job Market
Houston Area Unemployment Rate September 2019
Seasonally Adjusted
3.6% Down from 4.0% from a year ago Slightly higher than the statewide rate of 3.4%
Houston Area Total Nonfarm October 2019
Over-the-year Job Growth
+80,400
Houston MSA Total Nonfarm OTY 120,000
Dec-14 116,700 Aug-19 81,900
100,000 80,000
Aug-14 101,500
60,000
You are here
40,000 20,000 0 -20,000 Aug '14
Aug '15
Aug '16
Oct-16 -7,800
Aug '17
Aug '18
Aug '19
What’s Growing?
Houston MSA Over-the-year Net Growth Aug ‘18-’19 Total Nonfarm
81,900
Professional and Business Services
22,800
Manufacturing
11,500
Other Services
9,700
Educational and Health Services
9,600
Mining and Logging
6,600
Trade, Transportation, and Utilities
6,500
Government
5,500
Leisure and Hospitality
4,700
Construction
3,600
Financial Activities
3,100
Information
Everything but Information
-1,700
-15,000
5,000
25,000
45,000
65,000
85,000
Houston MSA Over-the-year Pct. Growth Aug ’18-’19 Other Services
8.7
Mining and Logging
8.3
Manufacturing
5.0
Professional and Business Services
4.6
Currently fastest growing sector 3x overall job market
Total Nonfarm Educational and Health Services
Financial Activities
2.7 2.4
1.9
Construction
1.6
Government
1.4
Leisure and Hospitality
1.4
Trade, Transportation, and Utilities
Aug 2019 Fastest OTY growth on record for Other Services
1.0
Information
-5.4 -8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
What’s Included in Other Services?
Makeup of Other Services Category Share of Total Automotive Repair & Maintenance 23% Personal Care Services (e.g. barbers, beauty salons, weight-loss centers) 15% Commercial & Industrial Machinery Equip. Repair (ex. Auto and Electronic) 13% Other Personal Services (e.g. non-vet pet care, photo devel., parking lots) 10% Private Households 8% Dry-cleaning & Laundry Services 7% Business, Professional, Labor, Political, & Similar Organizations 5% Civic & Social Organizations 5% Death Care Services 3% Electronic & Precision Equipment Repair and Maintenance 3% Personal & Household Goods Repair & Maintenance 2% Social Advocacy Organizations 2% Grantmaking & Giving Services 1% Religious Organizations 1% Other Services (Total) 100%
Jobs 20,649 13,776 11,893 8,915 7,632 6,264 4,776 4,561 2,870 2,273 1,557 1,486 1,084 847 89,822
Which of These 14 Categories Is Driving Growth in Other Services?
Commercial & Industrial Machinery Equip. Repair
March ‘18 – ‘19 337% growth +857 jobs
Galveston County
What About Mining and Logging?
Houston MSA Mining and Logging vs. Rig Count 3
Mining and Logging YOY Stdz 2
Rig Count YOY T+5 Stdz
1
0
-1
-2
-3
-4 Aug-91
Aug-93
Aug-95
Aug-97
Aug-99
Aug-01
Aug-03
Aug-05
Aug-07
Aug-09
Aug-11
Aug-13
Aug-15
Aug-17
Aug-19
Rig Count vs. Houston MSA Correlated Sectors OTY 2.0
1.0
Rig Count Professional and Business Services Mining and Logging Manufacturing
0.0
-1.0
Suggests job growth reported in 2019 may be over-stated
-2.0
-3.0
-4.0 Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
But there’s good news…..
Houston MSA Construction OTY QCEW vs. CES 25,000 20,000
Mar-19 15,200
Construction QCEW Construction CES
15,000
Difference: 12,600 jobs
10,000 5,000 0 -5,000 -10,000
Mar-19 2,600
Suggests job growth reported in 2019 may be under-stated
-15,000
Mar-14
Apr-15
May-16
Jun-17
Jul-18
Aug-19
2019 Workforce Report Card
www.wrksolutions.com 1.888.469.JOBS (5627) Workforce Solutions is an equal opportunity employer/program. Auxiliary aids and services are available upon request to individuals with disabilities. (Please request reasonable accommodations a 48minimum hours in of advance.) two business Relaydays Texas: in advance.) 1.800.735.2989 Relay Texas: (TDD) 1.800.735.2988 1.800.735.2989(voice) (TDD) or 1.800.735.2988 711 (voice) or 711
History of the Report Card 2011
2019 edition: 7th iteration
2010
2007 2006 2005
19 19
2015
Gulf Coast Workforce Board Report Card
A tool to gauge the region's competitiveness compared to similar metropolitan areas across the U.S. and engage stakeholders to create awareness regarding keys issues affecting the region
20
PART I: Report Card Background & Gulf Coast Indicator Performance
8 Comparison Metros Seattle
Denver
Phoenix San Diego
Dallas
Atlanta
San Antonio
Gulf Coast (Houston) 22
Miami
45 Indicators across 6 Major Measures Macro Economy & Industry Dynamics (6 Indicators)
Income Wealth & Poverty (10 Indicators)
23
Employment & Unemployment
Labor Force Composition
(5 Indicators)
(7 Indicators)
Quality of Life
Educational Achievement & Investment
(11 Indicators)
(6 Indicators)
The 2019 Results Area
24
Macro Economy Employment & Labor Force & Industry Unemployment Composition Dynamics
Income, Wealth, & Poverty
Quality of Life
Educational Achievement & Investment
Gulf Coast
B
C
B
C
B
C
Atlanta
C
B
B
B
B
A
Dallas
A
A
B
B
B
B
Denver
B
A
B
A
B
A
Miami
C
B
B
C
B
C
Phoenix
B
B
C
B
B
B
San Antonio
A
B
B
B
B
B
San Diego
B
B
B
B
B
A
Seattle
B
B
A
A
B
A
Gulf Coast Grades 2015 vs. 2019
Measure Macro Economy & Industry Dynamics Employment & Unemployment Labor Force Composition Income, Wealth, & Poverty Quality of Life Educational Achievement & Investment
25
2015 Report Card
2019 Report Card
A A
B C
B B
B C
B C
B C
Since the Last Report Card • Late-2014 fall in oil prices resulted in 2 years of no job growth across Gulf Coast Region • Hurricane Harvey causes damage to +100k structures but minimal long-term impact to job market • National economy and comparison areas saw continued positive momentum post-Great Recession
26
The Good News
Areas of Progress Since 2015 Report Card Faster growth in number of business establishments
28
Areas of Progress Since 2015 Report Card Faster job growth and falling unemployment
29
Areas of Progress Since 2015 Report Card Rising ‘real’ household incomes
30
Areas of Progress Since 2015 Report Card Fewer families in poverty and less reliance on public assistance
Poverty
31
Wealth
Areas of Progress Since 2015 Report Card Growing share of population with high school diploma, associate’s, or bachelor’s degree and higher
32
Areas of Progress Since 2015 Report Card Higher region-wide adjusted cohort high school graduation rates 90%
89.3%
89.3% 89%
88.6%
88.6%
2012-13
2013-14
88.8%
88.1%
88%
87.3% 87% 86% 85% 2010-11
2011-12
Source: NCES - Cohort entered fall four years prior to referenced school year. *Includes 40 of 76 Gulf Coast Region school districts for which data were available representing 95% of regional high school enrollment.
33
2014-15
2015-16
2016-17
PART II: Automation & AI: Implications & Recommendations for the Gulf Coast Region Workforce
Assessing the Impact of Automation/AI on the Gulf Coast Workforce
35 Gulf Coast Workforce Board
Technological Bottlenecks Limiting Automation
Creative Tasks ●
36
Originality ● Fine Arts
Perception Manipulation Tasks
Social Tasks
Finger Dexterity Manual Dexterity ● Cramped Workspace
Social Perceptiveness ● Negotiation ● Persuasion ● Care-giving
● ●
●
Oxford University Predictive Model • Oxford University researchers Frey and Osborne publish 2013 study “The Future of Employment: How Susceptible Are Jobs to Computerisation?” • Study was NOT a prediction of future job losses but how exposed existing jobs are to AI and automation • News outlets misrepresented findings by stating “47% of jobs in the U.S. will be displaced by automation”
37
Oxford University Predictive Model • The speed and extent of adoption of AI-based technologies will vary significantly by industry, occupation, specific employer, location, regulations, costs, labor shortages, etc. • The research assumes that an occupation is homogenous; occupational variation e.g. truck drivers of consumer goods vs. hazardous chemicals will likely be affected by AI in different ways with different timelines for adoption • Oxford model cannot account for new competitors’ disruption of traditional business models e.g. Amazon vis-à-vis retail, Uber vis-à-vis taxis
38
Gulf Coast Employment Chance of Automation
16% 37%
46%
Low (< 30%) 39
Moderate (30% to 70%)
High (> 70%)
Gulf Coast Employment Chance of Automation by Occupational Typical Education Required Master's
97%
1% 1%
Doctoral or professional
97%
2% 1%
Bachelor's
72%
Associate's
42%
Postsecondary nondegree
38%
Total, All Occupations
37%
HS diploma
29%
No formal credential
13%
-20% Low (< 30%) 40
23%
23%
36%
28%
34% 16%
46% 52%
19%
0%
84%
3% 20%
5%
40%
Moderate (30% to 70%)
60%
80%
100%
High (> 70%)
120%
90% 80%
Gulf Coast Employment Chance of Automation by Digital Skills Required Low Automation Risk (< 30% chance)
78%
Moderate Automation Risk (30% to 70% chance)
70%
High Automation Risk (> 70% chance)
60%
49%
50% 40%
37%
30% 20% 10% 0%
High Digital Skills 41
Source Methodologies: Metropolitan Policy Program at Brookings, Mark Muro “Digitalization and the American workforce” Oxford University, Carl Frey & Michael Osborne “The Future of Employment: How susceptible are jobs to computerisation?”
Medium Digital Skills
Low Digital Skills
Gulf Coast Employment Chance of Automation by Social Interaction Required Occupation Family
Relatively High Degree of Social Interaction Required
Relatively Low Degree of Social Interaction Required
Management Healthcare Practitioners & Technical Education, Training, & Library Arts, Design, Entertainment, Sports, & Media Community & Social Service Healthcare Support Personal Care & Service Legal Architecture & Engineering Computer & Mathematical Life, Physical, & Social Science Business & Financial Operations Installation, Maintenance, & Repair Construction & Extraction Protective Service Sales & Related Production Office & Administrative Support Transportation & Material Moving Building & Grounds Cleaning & Maintenance Farming, Fishing, & Forestry Food Preparation & Serving Related
Median Wages Avg. Chance of Automation $110,000 $78,000 $52,000 $50,000 $50,000 $28,000 $23,000 $118,000 $99,000 $89,000 $78,000 $75,000 $46,000 $44,000 $42,000 $38,000 $41,000 $37,000 $36,000 $23,000 $23,000 $22,000
14%
Low Chance of Automation (< 30%)
49%
Moderate Chance of Automation (30% to 70%)
81%
High Chance of Automation (> 70%)
Case Study: Human Role in AI & Automation
Role of Human Judgement in AI and Automation Input Data
Algorithm
Output/ Predictions
Decide appropriate inputs based on domain knowledge
Choose appropriate algorithm Determine reward function
Evaluate for consistency with original goals Assess cost of false positives
Role of Human Judgement 44 Source: adapted from Ahmed Elgammal AI Art Creative Process Schematic – www.artsy.net “What the Art World Is Failing to Grasp about Christie’s AI Portrait Coup” Source: Ajay Agrawal, Joshua Gans, Avi Goldfarb – www.hbr.org “How AI Will Change the Way We Make Decisions”
Gulf Coast Workforce Board
45
46
47
48
What went wrong?
What Went Wrong? Input 1
50 Source: malletsdarker / imgur
Input 2
Input 3
4 Likely Explanations • Too few examples for algorithm to learn from • Fundamental shift in distance of focal point from 1st and 2nd photos to 3rd
• Introduction of new elements (i.e. people) in 3rd photo not present in other 2 • Algorithm interpreted dark ski suit as tree shadows (note the omission of the person on the left)
51 Gulf Coast Workforce Board
Recommendations
52
2019 Report Card Recommendations 1) Make robust changes in public education to build a future-ready workforce emphasizing both digital and social skills (Page 34)
2) Encourage continued industrial diversification that builds on the regionâ&#x20AC;&#x2122;s existing business strengths (Page 36)
3) Encourage employer-driven talent development as a strategy to equip both businesses and workers to adapt to a rapidly changing workplace (Page 38) 53
What We Heard
Community Feedback • A need for ongoing career awareness among both students and their parents to better leverage local job opportunities • Employers who echoed their need for workers with fundamental workplace skills in addition to technical competencies • How the effects of a tight labor market are amplified in rural areas, where employers are even more challenged to find and keep qualified candidates, which in turn can limit the ability to attract further development • The tight labor market created an opportunity for employers to consider non-traditional candidates and work-based training • Early education can contribute to a tech-ready future workforce, but that enrichment requires even greater resources • District level CTE leaders consider themselves well-equipped to adapt to the changes driven by technology and automation but desire a more streamlined access to major employers to understand the market needs at scale 55
Discussion
Thank You! Thomas M. Brown Planner Gulf Coast Workforce Board/Workforce Solutions 713-993-4579 Thomas.Brown@wrksolutions.com wrksolutions.com/reportcard
Industry Example #1: Beverage Manufacturing NAICS
Industry
Industry Avg. Chance of Automation
Share of Regional Employment
Targeted Industry
3121
BeverageManufacturing Manufacturing Beverage
67%
0.1%
No
Occupation
Occupation % Chance of Automation
Retail Salespersons Sales Rep., Wholesale & Manufacturing, Ex. Tech. & Scientific Products 1st-Line Spvrs. of Production & Opr. Workers General & Operations Mgrs. Industrial Production Mgrs.
27 28 7 7 2
4 4 2 2 0.9
36 34 67 47 65
4 3 3 2 0.8
85 87 89 86 95
11 7 4 3 3
Automation Chance
Low < 30%
Demonstrators & Product Promoters Merchandise Displayers & Window Trimmers Moderate Industrial Machinery Mechanics 30% to 70% Bartenders Accountants & Auditors
High > 70%
58
Packaging & Filling Machine Oprs. & Tenders Sep., Filtering, Clarifying, Precipitating Still Mach. Set., Opr. & Tend. Industrial Truck & Tractor Oprs. Driver/Sales Workers Waiters & Waitresses
% Share of HSHG Industry Occupation Employment
Real Wage Growth 2009-2019
Employment Growth 2009-2019
Projected Emp Growth 2019-2029
5%
34%
14%
319%
67
32%
19%
18%
23%
-
Growth No. of Firms in Industry 2009-2019
Gulf Coast Region: Share of Beverage Manufacturing Employment by Chance of Automation
22%
62%
â&#x2013;˛
16%
â&#x2013;˛
Low
Moderate
High
Industry Example #2: Book Stores and News Dealers NAICS 4512
Automation Chance
Low < 30%
Industry Book Storesand and News News Dealers Book Stores Dealers
Occupation Retail Salespersons 1st-Line Spvrs. of Retail Sales Workers General & Operations Mgrs. Wholesale & Retail Buyers, Ex. Farm Products Sales Mgrs.
Demonstrators & Product Promoters Accountants & Auditors Moderate Business Operations Specialists, All Other 30% to 70% Market Research Analysts & Marketing Specialists Production, Planning, & Expediting Clerks
High > 70%
59
Cashiers Counter Attendants, Cafeteria, Food Concession, & Coffee Shop Stock Clerks & Order Fillers Shipping, Receiving, & Traffic Clerks Customer Service Representatives
Industry Avg. Chance of Automation
Share of Regional Employment
Targeted Industry
41%
0.0%
No
Occupation % Chance of Automation
% Share of HSHG Industry Occupation Employment
27 6 7 8 3
57 8 3 1 1
36 65 36 54 68
0.5 0.1 0.1 0.1 0.1
95 86 95 94 76
10 7 3 2 1
Real Wage Growth 2009-2019
Employment Growth 2009-2019
Projected Emp Growth 2019-2029
-36%
-36%
-14%
32%
19%
18%
Growth No. of Firms in Industry 2009-2019
-54% -68 23%
Gulf Coast Region: Share of Book Stores and News Dealers Employment by Chance of Automation
26% 1%
▲
73% ▲
Low
Moderate
High
-
Industry Example #3: Accounting, Tax Prep, Bookkeeping, Payroll NAICS
Industry
Industry Avg. Chance of Automation
Share of Regional Employment
Targeted Industry
5412
Accounting, TaxPreparation, Preparation, Bookkeeping, and Payroll Services Serv Accounting, Tax Bookkeeping, and Payroll
67%
0.8%
Y
Occupation
Occupation % Chance of Automation
Automation Chance
Low < 30%
Financial Mgrs. 1st-Line Spvrs. of Office & Admin. Support Workers General & Operations Mgrs. Executive Secretaries & Exec.Admin. Assistants Human Resources Specialists
Accountants & Auditors Sales Representatives, Services, All Other Moderate Bill & Account Collectors 30% to 70% Receptionists & Information Clerks Business Operations Specialists, All Other
High > 70%
60
Bookkeeping, Accounting, & Auditing Clerks Tax Preparers Office Clerks, General Secretaries & Admin. Assistants, Ex. Legal, Medical, & Executive Billing & Posting Clerks
% Share of HSHG Industry Occupation Employment
11 6 7 30 22
3 2 2 1 0.8
65 62 44 66 36
40 2 1 1 0.5
96 89 91 89 94
8 7 5 4 4
Real Wage Growth 2009-2019
Employment Growth 2009-2019
Projected Emp Growth 2019-2029
Growth No. of Firms in Industry 2009-2019
50%
29%
18%
21% 429
32%
19%
18%
23%
Gulf Coast Region: Share of Accounting, Tax Preparation, Bookkeeping, and Payroll Services Employment by Chance of Automation
13% 40%
â&#x2013;˛
47%
Low
Moderate
High
-