State of the Workforce Report V:
Region 2
Funding for this project was provided by
Partners for this project were
Alabama Department of Economic and Community Affairs
Alabama Department of Industrial Relations
Alabama Department of Postsecondary Education
Alabama Industrial Development Training
June 2011 Alabama Power Company
Center for Business and Economic Research University Center for Economic Development Institute for Social Science Research THE UNIVERSITY OF ALABAMA
The University of Alabama
State of the Workforce Report V: Region 2
June 2011 by Samuel Addy, Ph.D., Director and Research Economist Kathleen Gabler, Socioeconomic Research Associate Ahmad Ijaz, Director of Economic Forecasting Jonathan Law, Socioeconomic Research Associate Kilungu Nzaku, Ph.D., Postdoctoral Researcher Dong-Yop Oh, Graduate Research Assistant Arben Skivjani, Economic Forecaster Carolyn Trent, Socioeconomic Analyst Center for Business and Economic Research Culverhouse College of Commerce and Business Administration The University of Alabama Box 870221, Tuscaloosa, AL 35487-0221 Tel: (205) 348-6191 Fax: (205) 348-2951 uacber@cba.ua.edu Results Dissemination: Nisa Miranda, Director, University Center for Economic Development Underemployment Survey: Debra McCallum, Research Social Scientist and Director of the Capstone Poll Michael Conaway, Project Coordinator for the Capstone Poll Institute for Social Science Research
State of the Workforce Report V: Region 2
i
ii
UA/CBER
State of the Workforce Report V: Region 2
Acknowledgments Funding for this project was provided by the U.S. Small Business Administration (SBA) under grant/cooperative agreement number SBAHQ-10-I-0233. All opinions, conclusions, or recommendations expressed in this report are those of the authors and do not necessarily reflect the views of the SBA. Completion of this project was due to the timely contributions of many people. We are very grateful to the Labor Market Information (LMI) Division of the Alabama Department of Industrial Relations (ADIR). LMI provided significant staff time and this report would not have been possible without large amounts of data from LMI. Many thanks also to our colleagues at the Center for Business and Economic Research, the Capstone Poll, the Institute for Social Science Research, and the University Center for Economic Development for their help on various phases of this research project. Last, but not least, much gratitude is owed to the thousands of Alabamians who responded to the extensive survey on the state’s workforce and related issues, as well as to the community and industry leaders whose work on these issues provides the critical data required in reports of this kind. Partners on the project included: Alabama Department of Economic and Community Affairs Alabama Department of Industrial Relations Alabama Department of Postsecondary Education Alabama Industrial Development Training Alabama Power Company The University of Alabama
State of the Workforce Report V: Region 2
UA/CBER
iii
iv
UA/CBER
State of the Workforce Report V: Region 2
Contents Acknowledgments
iii
Summary
vii
Workforce Supply
1
Labor Force Activity
1
Commuting Patterns
3
Population
3
Per Capita Income
5
Educational Attainment
6
Underemployment and Available Labor
7
Workforce Demand
11
Industry Mix
11
Job Creation and Net Job Flows
12
High-Demand, Fast-Growing, High-Earning, and Sharp-Declining Occupations
13
Skills and Skills Gap Analyses
17
Education and Training Issues
20
Implications and Recommendations
23
State of the Workforce Report V: Region 2
UA/CBER
v
vi
UA/CBER
State of the Workforce Report V: Region 2
Summary
This report analyzes workforce supply and demand issues using available metrics of workforce characteristics for Workforce Development Region 2 and presents implications and recommendations.
Region 2 had a 9.3 percent unemployment rate in January 2011, with 38,336 unemployed. An underemployment rate of 22.7 percent for 2010 means that the region has a 122,678-strong available labor pool that includes 84,342 underemployed workers who are looking for better jobs and are willing to commute farther and longer for such jobs.
Net in-commuting fell from 4,527 in 2000 to 3,696 in 2006, but increased levels of commuting to, out of, and within the region led to congestion. However, the congestion eased in 2010 due to job losses. Continuous maintenance and development of transportation infrastructure and systems is important to avoid slowing economic development and recovery.
By sector the top five employers in the region are manufacturing; retail trade; professional, scientific, and technical services; health care and social assistance; and accommodation and food services. These five industries provided 206,527 jobs, 62.5 percent of the regional total in the first quarter of 2010. Two of these leading employers—manufacturing and professional, scientific, and technical services—paid higher wages than the region’s $3,304 monthly average. Economic development should continue to diversify and strengthen the region’s economy by retaining, expanding, and attracting more high-wage providing industries. Workforce development should also focus on preparing workers for these industries.
On average 17,051 jobs were created per quarter from second quarter 2001 to first quarter 2010; quarterly net job flows averaged 1,544. Job creation is the number of new jobs that are created either by new businesses or through expansion of existing firms. Net job flows reflect the difference between current and previous employment at all businesses.
The top five high-demand occupations are Registered Nurses; Computer Systems Analysts; Home Health Aides; Computer Software Engineers, Systems Software; and Licensed Practical and Licensed Vocational Nurses.
The top five fast-growing occupations are Marriage and Family Therapists; Veterinary Technologists and Technicians; Network Systems and Data Communications Analysts; Rehabilitation Counselors; and Medical Assistants.
The top 50 high-earning occupations are in health, management, engineering, computer, science, and finance fields and have a minimum salary of $83,157. Seven of the top 10 are health occupations.
Of the top 40 high-demand, the top 34 fast-growing, and 50 high-earning occupations, three belong to all three categories: Anesthesiologists; Computer Software Engineers, Applications; and Physical Therapists. Nine additional occupations are both high-demand and high-earning. Twenty occupations are both high-demand and fast-growing. State of the Workforce Report V: Region 2
UA/CBER
vii
Of the region’s 840 occupations and occupational categories, 79 are expected to decline over the 2008 to 2018 period. Twenty occupations are expected to sharply decline by at least 6 percent, with each losing a minimum of 40 jobs. Education and training for these 20 occupations should slow accordingly.
Skill and education requirements for jobs keep rising. Educational and training requirements of high-demand, fast-growing, and high-earning occupations demonstrate the importance of education in developing the future workforce. In the future, more jobs will require postsecondary education and training at a minimum.
The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs indicates a strong need for training in these skills. For Region 2 the pace of training needs to increase for technical, systems, and complex problem solving skills. The scale of training should be raised for basic and social skills. Ideally, all high school graduates should possess basic skills so that postsecondary and higher education can focus on other and more complex skills. Employers should be an integral part of planning for training as they can help identify future skill needs and any existing gaps.
From a 2008 base, a worker surplus of about 35,098 for 2018 and a worker shortfall of roughly 11,893 for 2025 are expected. This will demand a focus on worker skills through 2018, after which both skills and the expected shortfall must be priorities through 2025. Worker shortfalls for critical occupations will need to be addressed continuously. Strategies to address skill needs and worker shortfalls might include: (1) improvements in education and its funding; (2) use of economic opportunities to attract new residents; (3) focus on hard-to-serve populations (e.g. out-of-school youth); (4) lowering the high school dropout rate; (5) continuation and enhancement of programs to assess, retrain, and place dislocated workers; (6) encouragement of older worker participation in the labor force; and (7) facilitation of in-commuting.
Improving education is important because (i) a highly educated and productive workforce is a critical economic development asset, (ii) productivity rises with education, (iii) educated people are more likely to work, and (iv) it yields high private and social rates of return on investment. Workforce development must view all of education and other programs (e.g. adult education, career technical training, worker retraining, career readiness, etc.) as one system. Funding to support workforce development may require tax reform at state and local levels and should provide for flexibility as workforce needs change over time and demand different priorities. Publicizing both private and public returns to education can encourage individuals to raise their own educational attainment levels, while also promoting public and legislative support for education.
Higher incomes that come with improved educational attainment and work skills will help to increase personal income for the region as well as raise additional local (county and city) tax revenues. This is important, even for a region that has relatively high population and labor force growth rates.
Together, workforce development and economic development can build a strong, welldiversified Region 2 economy. Indeed, one cannot achieve success without the other.
viii
UA/CBER
State of the Workforce Report V: Region 2
Workforce Supply Labor Force Activity The labor force includes all persons in the civilian noninstitutional population who are age 16 and over and who have a job or are actively looking for one. Typically, those who have no job and are not looking for one are not included (e.g. students, retirees, discouraged workers, and the disabled). Table 2.1 shows labor force information for Region 2 and its eight counties for 2010 and January 2011. Alabama labor force information is available from the Labor Market Information (LMI) Division of the Alabama Department of Industrial Relations. LMI compiles data in cooperation with the U.S. Bureau of Labor Statistics. Table 2.1 Region 2 Labor Force Information
Cullman DeKalb Jackson Lawrence Limestone Madison Marshall Morgan Region 2 Alabama United States
Labor Force
2010 Employed
Unemployed
Rate (%)
37,306 28,716 25,527 15,403 37,602 168,102 39,858 55,167 407,681 2,127,211 153,889,000
33,857 25,234 22,902 13,634 34,361 155,434 36,352 49,635 371,409 1,925,064 139,064,000
3,449 3,483 2,625 1,768 3,241 12,669 3,506 5,533 36,274 202,147 14,825,000
9.2 12.1 10.3 11.5 8.6 7.5 8.8 10.0 8.9 9.5 9.6
Unemployed
Rate (%)
3,463 3,577 2,640 2,003 3,328 13,599 3,749 5,977 38,336 207,644 14,937,000
9.3 12.4 10.1 12.9 8.8 8.1 9.3 10.7 9.3 9.9 9.8
Labor Force Cullman DeKalb Jackson Lawrence Limestone Madison Marshall Morgan Region 2 Alabama United States
37,419 28,731 26,057 15,553 37,705 168,161 40,464 55,961 410,051 2,106,305 152,536,000
January 2011 Employed 33,956 25,154 23,417 13,550 34,377 154,562 36,715 49,984 371,715 1,898,661 137,599,000
Source: Alabama Department of Industrial Relations and U.S. Bureau of Labor Statistics.
Job losses resulting from the recession that began in December 2007 have raised county unemployment rates from a range of 7.5 percent to 12.1 percent for 2010 (8.9 percent for the region) to between 8.1 percent and 12.9 percent in January 2011, with 9.3 percent for the region. The unemployment rate was lowest in Madison County and highest in Lawrence. Four of the region’s counties had unemployment rates below Alabama’s 9.9 percent. Annual unemployment rates for 2000 to 2010 are shown in Figure 2.1. The region’s unemployment rates were low before the 2001 and the most recent recession. The 2003 high of 5.0 percent was due to State of the Workforce Report V: Region 2
UA/CBER
1
the effects of the 2001 recession. Employment gains since 2003 resulting from successful state and local economic development efforts brought unemployment to a record low 3.0 percent in 2007. However, the recent recession resulted in major job losses. In 2009 unemployment rose to 9.0 percent and slightly declined to 8.9 percent in 2010. Year-to-date monthly labor force data point to a higher regional unemployment rate for 2011 than the 8.9 percent seen in 2010. The slow recovery from the recent recession is expected to keep unemployment rates high for a few more years. Figure 2.1 Region 2 Unemployment Rate 10.0% 8.0% 6.0% 4.0% 2.0% 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: Alabama Department of Industrial Relations.
Nonagricultural employment of the region’s residents averaged 336,604 quarterly from the second quarter of 2001 to the first quarter of 2010 (Figure 2.2). The number of jobs has been declining steadily since the peak of 358,604 in the second quarter of 2008.
Figure 2.2 Region 2 Nonagricultural Employment 360,000 340,000 320,000 300,000
Source: Alabama Department of Industrial Relations and U.S. Census Bureau.
Table 2.2 shows worker distribution by age in Region 2 for the first quarter of 2010. Older workers, age 45 and over, are 42.5 percent of the region’s nonagricultural employment, just below the state’s 42.6 percent. The region’s 3.9 percent of workers who are age 65 and over is also slightly below the state’s 4.1 percent. To meet future occupational projections for growth and replacement, labor force participation of younger residents must increase; else older workers may have to work longer.
2
UA/CBER
State of the Workforce Report V: Region 2
Table 2.2 Workers by Age Group (First Quarter 2010) Age group 14-18 19-24 25-34 35-44 45-54 55-64 65+ 45 and over total Total all ages
Nonagricultural Employment Number Percent 6,739 2.0 35,367 10.7 71,069 21.5 76,870 23.3 81,017 24.5 46,292 14.0 12,993 3.9 140,302 42.5 330,347 100.0
Note: Rounding errors may be present. Nonagricultural employment is by place of work, not residence. Source: U.S. Census Bureau, Local Employment Dynamics Program.
Commuting Patterns In 2000 workers who commuted into the region exceeded residents who commuted out by 4,527 (Table 2.3). Although net in-commuters dropped to 3,696 in 2006, the level of in- and outcommuting more than doubled. There is significant commuting inside the region as well. Table 2.3 shows that one-way average commute time and distance for workers went down slightly in 2010 from 2009 implying that congestion eased. As population grows and the region recovers from the recent recession, more people will experience longer commute time and distance to work. Thus, transportation infrastructure and systems must be developed and maintained properly to ensure that the flow of goods and movement of workers are not hindered. Congestion slows the mobility of workers and goods and can thus impede economic development in the region.
Population The Region 2 population count of 869,183 for 2010 is 13.4 percent more than was recorded for 2000 (Table 2.4). Population grew in six counties and shrank in the other two. The region’s population growth was greater than the state’s and nation’s growth rate of 7.5 percent and 9.7 percent. Population growth was fastest in Limestone and Madison counties. Jackson and Lawrence counties lost population. Table 2.5 shows Region 2’s population counts, estimates, and projections by age group. The 65 and over age group grows rapidly after 2010, with the first of the baby boom generation turning 65 in 2011. As a result, growth of the prime working age group (20-64) and youth (0-19) will lag that of the total population. This poses a challenge for workforce development as employment growth is expected to outpace labor force growth in the long term. Communities that experience rapid job gains may need to consider investments in amenities and infrastructure to attract new residents.
State of the Workforce Report V: Region 2
UA/CBER
3
Table 2.3 Commuting Patterns Area Cullman DeKalb Jackson Lawrence Limestone Madison Marshall Morgan Region 2
Inflow, 2000 Number Percent 2,602 10.2 2,388 9.3 1,356 5.3 1,451 5.7 2,395 9.4 7,125 27.9 5,800 22.7 2,457 9.6 25,574 100.0
Outflow, 2000 Number Percent 4,937 23.5 3,098 14.7 3,772 17.9 1,244 5.9 1,542 7.3 2,943 14.0 2,352 11.2 1,159 5.5 21,047 100.0
Region 2
Inflow, 2006 Number Percent 57,471 100.0
Outflow, 2006 Number Percent 53,775 100.0
Average commute time (one-way) Less than 20 minutes 20 to 40 minutes 40 minutes to an hour More than an hour Average commute distance (one-way) Less than 10 miles 10 to 25 miles 25 to 45 miles More than 45 miles
2004 59.0 28.0 8.6 1.3 2004 46.2 31.6 13.1 4.7
2005/2006 55.0 28.7 9.6 2.0 2005/2006 45.7 31.2 13.0 4.9
Percent of workers 2008 2009 55.8 53.1 31.4 31.6 8.2 9.5 1.0 1.3 2008 2009 44.9 43.8 37.6 37.9 11.2 13.7 3.6 3.6
2010 53.4 35.0 8.3 1.7 2010 43.8 40.4 11.2 3.1
Note: Rounding errors may be present. Source: U.S. Census Bureau; Alabama Department of Industrial Relations; and Center for Business and Economic Research, The University of Alabama.
Table 2.4 Region 2 Population by County Cullman DeKalb Jackson Lawrence Limestone Madison Marshall Morgan Region 2 Alabama United States
1990 Census 67,613 54,651 47,796 31,513 54,135 238,912 70,832 100,043 665,495 4,040,587 248,709,873
2000 Census 77,483 64,452 53,926 34,803 65,676 276,700 82,231 111,064 766,335 4,447,100 281,421,906
2010 Census 80,406 71,109 53,227 34,339 82,782 334,811 93,019 119,490 869,183 4,779,736 308,745,538
Change 2000-2010 2,923 6,657 -699 -464 17,106 58,111 10,788 8,426 102,848 332,636 27,323,632
Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau.
4
UA/CBER
State of the Workforce Report V: Region 2
% Change 2000-2010 3.8 10.3 -1.3 -1.3 26.0 21.0 13.1 7.6 13.4 7.5 9.7
Table 2.5 Population by Age Group and Projections Age Group 0-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+ 20-64 Total Total Population
2000 213,316 47,346 51,060 55,058 64,096 61,995 54,050 50,071 40,575 34,428 94,340 458,679 766,335
2008 226,452 56,787 51,149 51,898 57,474 62,545 66,936 61,924 53,633 45,043 110,675 507,389 844,516
2018 236,341 62,938 61,909 60,104 57,136 56,827 61,634 66,503 68,872 60,153 145,880 556,076 938,297
2025 246,473 63,034 62,330 66,886 64,506 61,373 56,590 62,463 63,335 67,880 178,171 568,397 993,041
4.4% 9.6% 11.1%
8.8% 12.0% 17.6%
Change from 2008 0-19 20-64 Total Population
Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau.
Per Capita Income Per capita income (PCI) in Region 2 was $33,908 in 2009 (Figure 2.3), up 73 percent from 1994, and $497 above the state average of $33,411; Madison county ($39,897) had higher PCI than the state. PCI was highest in Madison County and lowest in DeKalb ($25,989).
Figure 2.3 Region 2 Per Capita Income $31,348 $32,873 $34,181 $33,908 $27,359 $28,711 $30,039 $26,127 $25,651 $24,813 $23,101 $23,642 $19,545 $20,403 $20,954 $21,935
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama.
Educational Attainment Educational attainment in 2005 to 2009 of Region 2 residents who were 25 years old and over is shown in Table 2.6 and Figures 2.4 and 2.5. Eighty percent graduated from high school and 23 percent held a bachelor’s or higher degree. Madison and Morgan counties have higher educational attainment than the other six and the regional attainment. Educational attainment is important as skills rise with education and high-wage jobs for the 21st century demand more skill sets.
State of the Workforce Report V: Region 2
UA/CBER
5
Table 2.6 Educational Attainment of Population 25 Years and Over, 2005 - 2009
Total No schooling completed Nursery to 4th grade 5th and 6th grade 7th and 8th grade 9th grade 10th grade 11th grade 12th grade, no diploma High school graduate/equivalent Some college, less than 1 year Some college, 1+ years, no degree Associate degree Bachelor’s degree Master’s degree Professional school degree Doctorate degree
Cullman 55,091 485 416 1,126 2,781 2,561 2,280 2,564 1,470 18,709 3,402 7,257 4,740 4,499 2,093 553 155
DeKalb 45,889 811 914 1,690 3,566 2,457 2,840 2,227 791 15,458 2,437 5,186 2,846 2,794 1,489 254 129
Jackson 36,770 355 575 870 2,167 1,694 1,720 1,817 697 13,944 2,609 3,974 2,183 2,730 1,031 321 83
Lawrence 23,233 292 130 423 1,135 954 1,434 965 473 9,104 1,258 3,021 1,646 1,718 472 118 90
Limestone 50,490 649 530 1,148 1,837 1,693 2,206 1,759 742 16,959 3,509 6,893 3,382 6,338 2,309 273 263
Madison 206,313 1,375 848 1,568 3,964 3,416 4,799 5,328 3,622 46,203 12,217 31,057 13,646 50,739 20,780 3,610 3,141
Marshall 58,036 781 1,081 1,688 2,937 2,563 2,793 2,604 1,106 18,008 4,066 7,689 4,181 5,441 2,548 401 149
Morgan 77,272 867 673 1,398 2,498 2,157 2,629 2,796 1,432 24,406 5,991 11,991 5,323 10,431 3,623 760 297
Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau.
Figure 2.4 High School Graduate or Higher, 2005 - 2009 75.2%
66.7%
73.1%
75.0%
79.1%
87.9%
73.2%
81.3%
80.1%
Figure 2.5 Bachelor's Degree or Higher, 2005 - 2009 37.9% 13.3%
10.2%
11.3%
10.3%
18.2%
14.7%
19.6%
Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau.
6
UA/CBER
State of the Workforce Report V: Region 2
23.4%
Region 2 553,094 5,615 5,167 9,911 20,885 17,495 20,701 20,060 10,333 162,791 35,489 77,068 37,947 84,690 34,345 6,290 4,307
Underemployment and Available Labor Labor force data are often limited to information on the employed and the unemployed that is available from government sources. However, this information is not complete from the perspective of employers. New or expanding employers are also interested in underemployment because current workers are potential employees. In fact, experience requirements in job ads are evidence that many prospective employers look beyond the unemployed for workers. Workers in occupations that underutilize their experience, training, and skills are underemployed. These workers might look for other work because their current wages are below what they believe they can earn or because they wish to not be underemployed. Underemployment occurs for various reasons including (i) productivity growth, (ii) spousal employment and income, and (iii) family constraints or personal preferences. Underemployment is unique to areas because of the various contributing factors combined with each area’s economic, social, and geographic characteristics. The existence of underemployment identifies economic potential that is not being realized. It is extremely difficult to measure this economic potential because of uncertainties regarding additional income that the underemployed can bring to an area. It is clear, however, that underemployment provides opportunities for selective job creation and economic growth. A business that needs skills prevalent among the underemployed could locate in places that have such workers regardless of those areas’ unemployment rates. A low unemployment rate, which may falsely suggest limited labor availability, is therefore not a hindrance to the business. The underemployed present a significant pool of labor because they tend to respond to job opportunities that they believe are better for reasons that include (i) higher income, (ii) more benefits, (iii) superior terms and conditions of employment, and (iv) a better match with skills, training, and experience. The underemployed also create opportunities for entry level workers as they leave lower-paying jobs for better-paying ones. Even if their previously held positions are lost or not filled (perhaps due to low unemployment or adverse economic conditions), there is economic growth in gaining higher-paying jobs. Such income growth boosts consumption, savings, and tax collections. Quantifying the size of the underemployed is a necessary first step in considering this group for economic development, workforce training, planning, and other purposes. It is important to note that the underemployed can take on more responsibilities and earn more income, but they cannot be counted on to address possible future worker shortages as they are already employed. Region 2 had an underemployment rate of 22.7 percent in 2010. Applying this rate to January 2011 labor force data means that 84,342 employed residents were underemployed (Table 2.7). Adding the unemployed gives a total available labor pool of 122,678 for the region. This is 3.1 times the number of unemployed and is a more realistic measure of the available labor pool in the region. Prospective employers must be able to offer the underemployed higher wages, better benefits or terms of employment, or some other incentives to induce them to change jobs. Underemployment rates ranged from 17.9 percent for Lawrence County to 28.8 percent for Cullman. Lawrence County had the smallest available labor pool and Madison had the largest.
State of the Workforce Report V: Region 2
UA/CBER
7
Table 2.7 Underemployed and Available Labor by County Labor Force Employed Underemployment rate Underemployed workers Unemployed Available labor pool
Labor Force Employed Underemployment rate Underemployed workers Unemployed Available labor pool
Region 2 410,051 371,715
Cullman 37,419 33,956
DeKalb 28,731 25,154
Jackson 26,057 23,417
Lawrence 15,553 13,550
22.7% 84,342 38,336 122,678
28.8% 9,776 3,463 13,239
27.6% 6,940 3,577 10,517
19.0% 4,442 2,640 7,082
17.9% 2,420 2,003 4,423
Limestone 37,705 34,377
Madison 168,161 154,562
Marshall 40,464 36,715
Morgan 55,961 49,984
18.2% 6,250 3,328 9,578
22.3% 34,467 13,599 48,066
20.3% 7,468 3,749 11,217
26.7% 13,331 5,977 19,308
Note: Rounding errors may be present. Based on January 2011 labor force data and 2010 underemployment rates. Source: Center for Business and Economic Research, The University of Alabama and Alabama Department of Industrial Relations.
Underemployment rates for counties, Workforce Development Regions (WDRs), and the state were determined from an extensive survey on the state’s workforce. A total of 1,411 complete responses were obtained from Region 2. About 51 percent (714 respondents) were employed, of whom 162 stated that they were underemployed. A lack of job opportunities in their area, low wages at available jobs, other family or personal obligations, living too far from jobs, and child care responsibilities are the primary reasons given for being underemployed. Ongoing economic development efforts can help in this regard. Nonworkers cite retirement and disability or other health concerns as the main reasons for their status, but some also cite a lack of job opportunities in their area and low wages as additional key factors. Such workers may become part of the labor force if their problems can be addressed. A comparison of underemployed workers to the overall workforce in Region 2 shows that: 8
Fewer work full-time and more of the part-timers prefer full-time work. More hold multiple jobs. Their commute times and distance travelled to work are longer. More are transportation and material moving workers, sales and related occupations, personal care and service, building and grounds cleaning and maintenance, healthcare practitioners and technicians, and computer and mathematical workers. More are in retail trade, real estate, health care and social assistance, entertainment and recreation, and accommodation and food services industries. They earn less and have shorter job tenure. Fewer believe their jobs fit well with their education and training, skills, and experience. More believe they are qualified for a better job. UA/CBER
State of the Workforce Report V: Region 2
More would leave their current jobs for higher income. More are willing to commute longer and farther for a better job. Fewer are satisfied with their current jobs. More are willing to train for a better job except when they have to pay all training costs. More have sought better jobs in the preceding quarter. Their median age is 48 years, same as that of the overall workforce. They have lower educational attainment. Fewer are married, male, or white. Fewer are Hispanic.
Table 2.8 shows the detailed survey results on job satisfaction and willingness to train. Responses for overall job satisfaction as well as various aspects of the job were obtained. In general most of the region’s workers (77.9 percent) are satisfied or completely satisfied with their jobs. Workers are most satisfied with their shift and least satisfied with the earnings they receive. Clearly, fewer underemployed workers are satisfied with their jobs (63.0 percent). The underemployed are also much more dissatisfied with their earnings. Workers are generally willing to train for a new or better job, with the underemployed being more willing (72.1 percent vs. 59.1 percent). However, the willingness to train is strongly influenced by who pays for the cost of training. Workers typically do not wish to pay for the training and so their willingness is highest when the cost is fully borne by government and lowest when the trainee must pay the full costs. The underemployed are more willing to train for the new or better job except when they have to bear the full cost of training. The results strongly show that workers expect the government to bear at least a part of the training cost. This expectation may result from worker awareness of government workforce programs that provide such assistance.
State of the Workforce Report V: Region 2
UA/CBER
9
Table 2.8 2010 Job Satisfaction and Willingness to Train (Percent) Job Satisfaction Completely Dissatisfied Dissatisfied Employed Overall Earnings Retention Work Hours Shift Conditions Commuting Distance Underemployed Overall Earnings Retention Work Hours Shift Conditions Commuting Distance
Employed For a new or better job If paid by trainee If paid by trainee and government If paid by government Underemployed For a new or better job If paid by trainee If paid by trainee and government If paid by government
UA/CBER
Satisfied
Completely Satisfied
2.1
3.1
16.8
30.8
47.1
7.3
10.1
22.7
27.6
31.9
3.9
4.5
12.9
20.3
57.6
1.1
3.1
9.4
24.8
61.3
4.5
4.2
11.2
21.9
58.0
2.4
2.8
7.4
15.0
72.0
2.5
4.3
14.7
28.2
50.1
3.8
4.1
10.8
17.4
63.9
3.7
6.8
26.5
33.3
29.6
14.8
19.8
27.2
21.0
17.3
9.3
6.8
19.1
22.8
40.7
1.9
4.9
15.4
28.4
48.8
6.8
5.6
11.7
25.3
50.0
3.1
2.5
11.1
12.4
71.0
4.9
6.2
21.6
29.0
38.3
1.9
9.3
14.2
14.2
60.5
Willingness to Train Completely Unwilling Unwilling
Neutral
Willing
Completely Willing 45.3
18.3
5.5
15.8
13.9
44.4
19.8
23.0
5.7
4.1
11.1
14.8
35.9
19.6
15.4
5.7
3.9
10.7
13.7
65.0
13.6
3.4
8.8
15.0
57.1
39.4
19.7
29.1
3.2
3.2
8.7
11.0
37.0
18.1
20.5
3.2
0.8
6.3
12.6
77.2
Note: Rounding errors may be present. Source: Center for Business and Economic Research, The University of Alabama.
10
Neutral
State of the Workforce Report V: Region 2
Workforce Demand Industry Mix The manufacturing sector was the leading employer in Region 2 with 64,915 jobs in first quarter 2010 (Table 2.9). Rounding out the top five industries by employment are retail trade; professional, scientific, and technical services; health care and social assistance; and accommodation and food services. These five industries provided 206,527 jobs, 62.5 percent of the regional total. The average monthly wage across all industries in the region was $3,304; two of the leading employers paid more than this average. New hire monthly earnings averaged $2,110, about 64 percent of the region’s average monthly wage. The highest average monthly wages were for professional, scientific, and technical services at $5,987, mining $4,670, wholesale trade $4,204, and utilities $4,185. Accommodation and food services paid the least at $1,217. Professional, scientific, and technical services had the highest average monthly new hire wages with $4,903, followed by management of companies and enterprises at $4,732. Art, entertainment, and recreation paid newly hired workers the least, $799. Table 2.9 Industry Mix (First Quarter 2010) Industry by 2-digit NAICS Code 11 Agriculture, Forestry, Fishing and Hunting 21 Mining 22 Utilities 23 Construction 31-33 Manufacturing 42 Wholesale Trade 44-45 Retail Trade 48-49 Transportation and Warehousing 51 Information 52 Finance and Insurance 53 Real Estate and Rental and Leasing 54 Professional, Scientific, and Technical Services 55 Management of Companies and Enterprises 56 Administrative and Support and Waste Management and Remediation Services 61 Educational Services 62 Health Care and Social Assistance 71 Arts, Entertainment, and Recreation 72 Accommodation and Food Services 81 Other Services (Except Public Administration) 92 Public Administration ALL INDUSTRIES
Total Employment 1,635 487 2,427 14,325 64,915 11,301 40,672 8,489 4,000 8,679 3,373 36,966 1,928 18,845
Share 0.49% 0.15% 0.73% 4.34% 19.65% 3.42% 12.31% 2.57% 1.21% 2.63% 1.02% 11.19% 0.58% 5.70%
Rank 19 20 17 8 1 10 2 12 14 11 15 3 18 7
26,637 36,852 2,531 27,122 6,910 12,253 330,347
8.06% 11.16% 0.77% 8.21% 2.09% 3.71% 100.00%
6 4 16 5 13 9
Average Monthly Wage $2,510 $4,670 $4,185 $3,324 $4,052 $4,204 $2,050 $2,709 $3,648 $3,963 $2,461 $5,987 $4,108 $2,215
Average Monthly New Hire Earnings $1,519 $4,527 $1,896 $3,950 $2,695 $3,029 $1,155 $2,254 $1,815 $2,881 $1,819 $4,903 $4,732 $1,884
$2,943 $2,902 $1,323 $1,217 $2,327 $2,728 $3,304
$844 $1,855 $799 $918 $1,963 $1,987 $2,110
Source: Alabama Department of Industrial Relations and U.S. Census Bureau.
State of the Workforce Report V: Region 2
UA/CBER
11
By broad industry classification, service providing industries generated almost 72 percent of jobs in first quarter 2010 (Figure 2.6). Goods producing industries were next with about 25 percent and public administration accounted for 3.7 percent. The distribution is for all nonagricultural jobs in the region, but there is significant variation by county. Figure 2.6 Region 2 Employment Distribution Public Administration
3.7%
Service Providing
71.7%
Goods Producing
24.6% 0%
20%
40%
60%
80%
100%
Source: Alabama Department of Industrial Relations and U.S. Census Bureau.
Job Creation and Net Job Flows On average, 17,051 jobs were created per quarter from second quarter 2001 to first quarter 2010 (Figure 2.7); quarterly net job flows averaged 1,544 (Figure 2.8). Quarterly net job flows over the period have fluctuated between a loss of 4,639 to a gain of 6,794. Both job creation and net job flows have been rising since the third quarter of 2009 although the level of job creation is below the pre-2008 levels. Job creation refers to the number of new jobs that are added into the region either by new area businesses or through the expansion of existing firms. Net job flows reflect the difference between current and previous employment at all businesses. Figure 2.7 Job Creation in Region 2 22,000 19,000 16,000 13,000 10,000
Figure 2.8 Region 2 Net Job Flows 8,000 4,000 0 -4,000 -8,000
Source: Alabama Department of Industrial Relations and U.S. Census Bureau.
12
UA/CBER
State of the Workforce Report V: Region 2
High-Demand, Fast-Growing, High-Earning, and Sharp-Declining Occupations Out of a total 840 occupations and occupational categories in the region, 725 are single occupations. Table 2.10 shows the 40 occupations that are expected to be in high-demand, ranked by projected average annual job openings over the 2008 to 2018 period. Many of these occupations are common to three of the five largest employment sectors identified earlier (Table 2.9): manufacturing; professional, scientific, and technical services; and health care and social assistance. Thus, these sectors will continue to dominate employment in the region. The top five high-demand occupations are Registered Nurses; Computer Systems Analysts; Home Health Aides; Computer Software Engineers, Systems Software; and Licensed Practical and Licensed Vocational Nurses. Twenty of the high-demand occupations are also fast-growing. This means that these 20 occupations have a minimum annual growth rate of 2.82 percent, much faster than the regional and state occupational growth rates of 1.23 percent and 1.01 percent, respectively. The 34 fastest growing occupations ranked by projected growth of employment are listed in Table 2.11. Most of these occupations are related to health and professional, scientific, and technical services industries. The top five fast-growing occupations are Marriage and Family Therapists; Veterinary Technologists and Technicians; Network Systems and Data Communications Analysts; Rehabilitations Counselors; and Medical Assistants. Table 2.12 shows the 50 selected highest earning occupations in the region. These occupations are mainly in health, management, engineering, computer, science, and finance fields. Seven of the top 10 listed are health occupations. Any discussion of earnings must consider that wages vary with experience. Occupations with the highest entry wages may not necessarily have the highest average or experienced wages. The selected high-earning occupations are generally not fast-growing or in high-demand. Twelve occupations are both high-earning and in high-demand (Table 2.10). The following three occupations are in high-demand, fast-growing, and high-earning: 1. Anesthesiologists 2. Computer Software Engineers, Applications 3. Physical Therapists Of the region’s 840 occupations and occupational categories, 79 are expected to decline over the 2008 to 2018 period. Employment in the 20 sharpest-declining occupations will fall by at least 6 percent, with each losing a minimum of 40 jobs over the period (Table 2.13). No efforts should be made to sustain these occupations because they are declining as a result of structural changes in the economy of the region.
State of the Workforce Report V: Region 2
UA/CBER
13
Table 2.10 Selected High-Demand Occupations (Base Year 2008 and Projected Year 2018) Average Annual Job Openings Occupation Registered Nurses Computer Systems Analysts* Home Health Aides* Computer Software Engineers, Systems Software Licensed Practical and Licensed Vocational Nurses Accountants and Auditors Aircraft Structure, Surfaces, Rigging, & Systems Assemblers* Aerospace Engineers Medical Assistants* Computer Software Engineers, Applications* Logisticians Management Analysts Pharmacy Technicians* Civil Engineers Network and Computer Systems Administrators* Network Systems and Data Communications Analysts* Industrial Engineers Sales Representatives, Wholesale & Manufacturing, Technical & Scientific Products Surveyors Construction and Building Inspectors Dental Assistants* Dental Hygienists* Employment, Recruitment, and Placement Specialists Pharmacists Computer and Information Systems Managers Environmental Engineers Physical Therapists* Environmental Scientists & Specialists, Including Health Medical and Health Services Managers Medical and Public Health Social Workers* Vocational Education Teachers, Postsecondary* Aircraft Mechanics and Service Technicians* Anesthesiologists* Cardiovascular Technologists and Technicians* Database Administrators* Personal Financial Advisors Physical Therapist Assistants* Veterinarians* Chiropractors Occupational Therapists*
Total 320 145 140 115 115 105 90 85 85 80 80 75 75 65 55 55 45 40 40 35 30 30 30 30 25 25 25 20 20 20 20 15 15 15 15 15 15 15 10 10
Due to Growth 210 85 120 70 55 55 65 45 70 60 50 40 45 30 35 40 25 20 20 25 20 20 15 20 15 10 20 10 10 15 10 15 10 10 10 10 10 10 5 5
Note: Occupations are growth- and wages-weighted and data are rounded to the nearest 5. Occupations in bold are also high-earning. * Qualify as both high-demand and fast-growing occupations. Source: Alabama Department of Industrial Relations and Center for Business and Economic Research, The University of Alabama.
14
UA/CBER
State of the Workforce Report V: Region 2
Due to Separations 110 65 20 40 60 50 25 40 15 20 30 35 35 35 20 15 20 20 20 15 10 10 15 10 10 10 5 10 10 5 5 5 5 5 5 5 5 5 0 0
Table 2.11 Selected Fast-Growing Occupations (Base Year 2008 and Projected Year 2018) Employment Occupation Marriage and Family Therapists Veterinary Technologists and Technicians Network Systems and Data Communications Analysts* Rehabilitation Counselors Medical Assistants* Physical Therapist Aides Aircraft Mechanics and Service Technicians* Home Health Aides* Computer Software Engineers, Applications* Audiologists Occupational Therapists* Physical Therapist Assistants* Aircraft Structure, Surfaces, Rigging, and Systems Assemblers* Physical Therapists* Medical and Public Health Social Workers* Avionics Technicians Occupational Therapist Assistants Personal and Home Care Aides Pharmacy Technicians* Veterinary Assistants and Laboratory Animal Caretakers Cardiovascular Technologists and Technicians* Biological Technicians Fitness Trainers and Aerobics Instructors Veterinarians Computer Systems Analysts* Environmental Engineering Technicians* Network and Computer Systems Administrators* Dental Assistants* Database Administrators* Vocational Education Teachers, Postsecondary* Physicians and Surgeons, All Other Paralegals and Legal Assistants Dental Hygienists* Anesthesiologists*
2008
2018
60 110 650 170 1,220 90 260 2,380 1,240 40 120 220 NA 370 300 NA 50 390 1,120 270 300 NA 420 310 2,360 200 980 580 320 350 680 360 550 250
100 180 1,050 270 1,900 140 400 3,590 1,870 60 180 330 NA 550 430 NA 70 540 1,550 370 410 NA 570 420 3,190 270 1,320 780 430 470 910 480 730 330
Percent Change 67 64 62 59 56 56 54 51 51 50 50 50 50 49 43 40 40 38 38 37 37 36 36 35 35 35 35 34 34 34 34 33 33 32
Annual Growth (Percent)
Average Annual Job Openings
5.24 5.05 4.91 4.73 4.53 4.52 4.40 4.20 4.19 4.14 4.14 4.14 4.11 4.04 3.67 3.42 3.42 3.31 3.30 3.20 3.17 3.10 3.10 3.08 3.06 3.05 3.02 3.01 3.00 2.99 2.96 2.92 2.87 2.82
5 10 55 10 85 5 15 140 80 5 10 15 90 25 20 5 5 20 75 15 15 10 25 15 145 10 55 30 15 20 35 15 30 15
Note: Employment data are rounded to the nearest 10 and job openings are rounded to the nearest 5. Occupations in bold are also high-earning. * Qualify as both high-demand and fast-growing occupations. NA - Not available. Source: Alabama Department of Industrial Relations and Center for Business and Economic Research, The University of Alabama.
State of the Workforce Report V: Region 2
UA/CBER
15
Table 2.12 Selected High-Earning Occupations (Base Year 2008 and Projected Year 2018) Mean Average Annual Annual Annual Job Growth 2008 2018 Occupation Salary ($) Openings (Percent) Surgeons 170 200 1.64 5 226,497 Physicians and Surgeons, All Other 680 910 2.96 35 223,041 Anesthesiologists* 250 330 2.82 15 220,389 Psychiatrists 60 80 2.92 5 215,300 Dentists, General 340 380 1.12 10 179,984 Internists, General 130 150 1.44 5 171,704 Chief Executives 1,090 1,140 0.45 35 164,461 Family and General Practitioners 190 230 1.93 5 145,155 Environmental Engineers* 410 520 2.41 25 135,215 Personal Financial Advisors* 350 460 2.77 15 122,584 Pharmacists* 650 830 2.47 30 118,721 Engineering Managers 1,150 1,310 1.31 40 116,532 Lawyers 970 1,130 1.54 35 115,805 Podiatrists 40 50 2.26 5 111,945 Marketing Managers 210 250 1.76 10 110,471 Computer and Information Systems Managers* 640 780 2.00 25 108,200 Engineers, All Other 3,260 3,650 1.14 75 106,879 Financial Managers 820 930 1.27 25 106,665 Natural Sciences Managers 50 60 1.84 0 106,652 Physicists 140 160 1.34 5 105,800 Aerospace Engineers* 2,120 2,560 1.90 85 103,838 Computer and Information Scientists, Research 200 230 1.41 10 101,707 Purchasing Managers 300 330 0.96 15 99,861 Psychologists, All Other 20 20 0.00 0 99,535 General and Operations Managers 6,580 6,930 0.52 195 97,642 Sales Managers 520 590 1.27 20 96,402 Computer Hardware Engineers 960 1,080 1.18 40 94,649 Electronics Engineers, Except Computer 1,220 1,350 1.02 40 93,947 Materials Engineers 280 340 1.96 15 93,902 Managers, All Other 2,160 2,440 1.23 70 93,723 Clinical, Counseling, and School Psychologists 190 230 1.93 10 92,855 Civil Engineers* 1,310 1,600 2.02 65 91,263 Operations Research Analysts 280 290 0.35 5 91,191 Securities, Commodities, and Financial Services Sales Agents 150 170 1.26 5 90,988 Education Administrators, Postsecondary 260 300 1.44 10 90,832 Computer Software Engineers, Applications* 1,240 1,870 4.19 80 90,138 Computer Software Engineers, Systems Software* 2,830 3,550 2.29 115 89,404 Computer Specialists, All Other 990 1,230 2.19 50 87,871 Human Resources Managers, All Other 140 170 1.96 5 87,684 Management Analysts* 2,040 2,460 1.89 75 87,650 Electrical Engineers 1,380 1,570 1.30 50 87,407 Physician Assistants 60 70 1.55 5 87,310 Chiropractors* 200 260 2.66 10 86,681 Chemical Engineers 320 340 0.61 10 86,351 Optometrists 120 150 2.26 5 86,236 Physical Therapists* 370 550 4.04 25 85,348 Public Relations Managers 220 250 1.29 10 84,516 Construction Managers 1,520 1,780 1.59 50 83,897 Social Scientists and Related Workers, All Other 70 80 1.34 5 83,896 Health and Safety Engineers, Except Mining Safety Engineers and Inspectors 130 140 0.74 5 83,157 Note: Employment and salaries data are rounded to the nearest 10; openings to the nearest 5. The salary data provided are based on the May 2010 release of the Occupational Employment Statistics (OES) combined employment and wage file. Estimates for specific occupations may include imputed data. Occupations in bold are also fast-growing. Employment
* Qualify as both high-earning and high-demand occupations. Source: Center for Business and Economic Research, The University of Alabama and Alabama Department of Industrial Relations.
16
UA/CBER
State of the Workforce Report V: Region 2
Table 2.13 Selected Sharp-Declining Occupations (Base Year 2008 and Projected Year 2018) Occupation Textile Knitting and Weaving Machine Setters, Operators, and Tenders Sewing Machine Operators Electrical and Electronic Equipment Assemblers Farmers and Ranchers Packers and Packagers, Hand Order Clerks Pressers, Textile, Garment, and Related Materials Textile Winding, Twisting, & Drawing Out Machine Setters, Operators, & Tenders Cutting, Punching, & Press Machine Setters, Operators, & Tenders, Metal & Plastic Machine Feeders and Offbearers Textile Bleaching and Dyeing Machine Operators and Tenders File Clerks Packaging and Filling Machine Operators and Tenders Textile Cutting Machine Setters, Operators, and Tenders Computer Operators Lathe & Turning Machine Tool Setters, Operators, & Tenders, Metal & Plastic Coil Winders, Tapers, and Finishers Photographic Processing Machine Operators Extruding & Forming Machine Setters, Operators, & Tenders, Synthetic & Glass Fibers Weighers, Measurers, Checkers, and Samplers, Recordkeeping
Employment 2008 2018 1,300 640 1,600 1,080 1,840 1,390 3,780 3,350 2,230 1,800 570 370 630 430 530 330 1,480 1,300 940 760 420 250 450 290 1,200 1,080 380 290 330 250 310 240 190 130 130 70 NA NA 170 130
Net Change -660 -520 -450 -430 -430 -200 -200 -200 -180 -180 -170 -160 -120 -90 -80 -70 -60 -60 -40 -40
Percent Change -37 -27 -29 -24 -50 -45 -9 -7 -14 -15 -10 -8 -8 -9 -19 -29 -6 -22 -17 -6
Note: Employment data are rounded to the nearest 10. NA - Not available. Source: Alabama Department of Industrial Relations and Center for Business and Economic Research, The University of Alabama.
Skills and Skills Gap Analyses Jobs require skill sets and it is necessary that jobholders have the relevant skills. Table 2.14 shows skill types and definitions as provided by O*NET Online, which offers skill sets for all occupations ranked by the degree of importance. High-earning occupations typically require skills that are obtained in the pursuit of the high educational attainment levels that such jobs require. Lower earning occupations require more basic skill sets. Some occupations have no minimum skill set requirements (e.g. dishwashers and maids). Table 2.15 shows the percentage of selected occupations in the region that list a particular skill as primary. We define primary skills as the 10 most important skills in the required skill set for an occupation. It is important to note that a particular skill may be more important and more extensively used in one occupation than another. Table 2.15 does not address such crossoccupational skill importance comparisons. In general, basic skills are most frequently listed as primary, which means that they are important for practically all jobs.
State of the Workforce Report V: Region 2
UA/CBER
17
Table 2.14 Skill Types and Definitions Basic Skills: Developed capacities that facilitate learning or the more rapid acquisition of knowledge. Active Learning — Understanding the implications of new information for both current and future problem-solving and decision-making. Active Listening — Giving full attention to what other people are saying, taking time to understand the points being made, asking questions as appropriate, and not interrupting at inappropriate times. Critical Thinking — Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions, or approaches to problems. Learning Strategies — Selecting and using training/instructional methods and procedures appropriate for the situation when learning or teaching new things. Mathematics — Using mathematics to solve problems. Monitoring — Monitoring / Assessing performance of yourself, other individuals, or organizations to make improvements or take corrective action. Reading Comprehension — Understanding written sentences and paragraphs in work-related documents. Science — Using scientific rules and methods to solve problems. Speaking — Talking to others to convey information effectively. Writing — Communicating effectively in writing as appropriate for the needs of the audience. Complex Problem Solving Skills: Developed capacities used to solve novel, ill-defined problems in complex, real-world settings. Complex Problem Solving — Identifying complex problems and reviewing related information to develop and evaluate options and implement solutions. Resource Management Skills: Developed capacities used to allocate resources efficiently. Management of Financial Resources — Determining how money will be spent to get the work done and accounting for these expenditures. Management of Material Resources — Obtaining and seeing to the appropriate use of equipment, facilities, and materials needed to do certain work. Management of Personnel Resources — Motivating, developing, and directing people as they work, identifying the best people for the job. Time Management — Managing one's own time and the time of others. Social Skills: Developed capacities used to work with people to achieve goals. Coordination — Adjusting actions in relation to others' actions. Instructing — Teaching others how to do something. Negotiation — Bringing others together and trying to reconcile differences. Persuasion — Persuading others to change their minds or behavior. Service Orientation — Actively looking for ways to help people. Social Perceptiveness — Being aware of others' reactions and understanding why they react as they do. Systems Skills: Developed capacities used to understand, monitor, and improve socio-technical systems. Judgment and Decision Making — Considering the relative costs and benefits of potential actions to choose the most appropriate one. Systems Analysis — Determining how a system should work and how changes in conditions, operations, and the environment will affect outcomes. Systems Evaluation — Identifying measures or indicators of system performance and the actions needed to improve or correct performance, relative to the goals of the system. Technical Skills: Developed capacities used to design, set-up, operate, and correct malfunctions involving application of machines or technological systems. Equipment Maintenance — Performing routine maintenance on equipment and determining when and what kind of maintenance is needed. Equipment Selection — Determining the kind of tools and equipment needed to do a job. Installation — Installing equipment, machines, wiring, or programs to meet specifications. Operation and Control — Controlling operations of equipment or systems. Operation Monitoring — Watching gauges, dials, or other indicators to make sure a machine is working properly. Operations Analysis — Analyzing needs and product requirements to create a design. Programming — Writing computer programs for various purposes. Quality Control Analysis — Conducting tests and inspections of products, services, or processes to evaluate quality or performance. Repairing — Repairing machines or systems using the needed tools. Technology Design — Generating or adapting equipment and technology to serve user needs. Troubleshooting — Determining causes of operating errors and deciding what to do about it. Source: O*NET Online (http://online.onetcenter.org/skills/).
18
UA/CBER
State of the Workforce Report V: Region 2
Table 2.15 Percentage of Selected Occupations for Which Skill Is Primary Selected High-Demand Occupations
Selected Fast-Growing Occupations
Basic Skills Active Learning Active Listening Critical Thinking Learning Strategies Mathematics Monitoring Reading Comprehension Science Speaking Writing
30 93 93 3 13 63 85 28 90 50
38 94 91 6 9 82 68 15 91 35
38 74 78 2 12 38 66 34 72 42
Complex Problem Solving Skills Complex Problem Solving
60
53
64
Resource Management Skills Management of Financial Resources Management of Material Resources Management of Personnel Resources Time Management
0 0 5 30
0 0 0 24
2 0 10 22
Social Skills Coordination Instructing Negotiation Persuasion Service Orientation Social Perceptiveness
43 10 3 5 43 48
44 18 0 0 53 56
28 4 6 12 14 36
Systems Skills Judgment and Decision Making Systems Analysis Systems Evaluation
70 18 10
68 21 12
74 14 8
Technical Skills Equipment Maintenance Equipment Selection Installation Operation and Control Operation Monitoring Operations Analysis Programming Quality Control Analysis Repairing Technology Design Troubleshooting
3 0 0 3 13 18 10 5 3 0 3
6 0 0 3 18 9 9 9 6 0 6
0 0 0 0 4 20 6 0 0 0 0
Selected High-Earning Occupations
Note: Rounding errors may be present. Source: O*NET Online and Center for Business and Economic Research, The University of Alabama.
State of the Workforce Report V: Region 2
UA/CBER
19
High-earning occupations require more science, complex problem solving, resource management, persuasion, negotiation, judgment and decision making, and operation analysis than both highdemand and fast-growing jobs. These are skills that require long training periods and postsecondary education. However, high-earning jobs require slightly less social skills (except persuasion and negotiation) and significantly less technical skills (except operations analysis). High-demand occupations require somewhat more complex problem solving and resource management skills than fast-growing occupations; but less social and technical skills. Table 2.16 shows skill gap indexes for all 35 skills in Table 2.14. Skills gap indexes range up to 100 and are standardized measures of the gap between current supply and projected demand. The index does not provide any information about current or base year skill supply. Its focus is on the projection period, which for Table 2.16 is 2008 to 2018, and identifies critical skill needs. The index essentially ranks expected training needs. The higher the index the more critical is the skill over the specified projection period. For policy and planning purposes, skill gap indexes have to be considered together with replacement indexes, which are the expected shares of job openings due to replacement. Replacement is necessary because of turnover and people leaving the labor force. The smaller the replacement index, the larger the share of job openings due to growth, which in turn implies a need to increase the pace of skill training. Skill gap indexes point to the need to ramp up the scale of skill training while replacement indexes address the pace of training. By skill type the skill gap indexes show that basic skills are most critical followed by social, complex problem solving, resource management, system, and technical skills. The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs indicates a strong need for training in these skills. The pace of training needs to increase for technical, systems, and complex problem solving skills; the scale of training should be raised for basic and social skills. Education and Training Issues Educational attainment in Region 2 is above that of the state as a whole. Eighty percent of residents age 25 and over had graduated from high school in 2000, compared to nearly 81 percent for Alabama. Of that population, about 23 percent have a bachelor’s or higher degree versus 22 percent for the state. Skill and education requirements for jobs keep rising. This highlights a strong need to raise educational attainment as rates vary considerably across the region. Table 2.17 shows the number of selected occupations in the region for which a particular education/training category is most common. In general, high-earning occupations require high educational attainment levels; all but two of the high-earning occupations require a bachelor’s or higher degree. Thirty one (78 percent) of the 40 high-demand occupations require an associate degree at the minimum and 27 (68 percent) require a bachelor’s or higher degree. Twenty-three (68 percent) of the 34 fast-growing occupations require an associate degree at the minimum, with 16 (47 percent) requiring a bachelor’s or higher degree. The 2008 to 2018 occupational projections indicate that future jobs will require postsecondary education and training at a minimum. Job ads are increasingly requiring a high school diploma or
20
UA/CBER
State of the Workforce Report V: Region 2
GED at a minimum. Of the region’s 840 occupations and occupational categories, 79 are expected to decline over the period and education and training for these should slow accordingly.
Table 2.16 Skills Gap Indexes (Base Year 2008 and Projected Year 2018) Skill Reading Comprehension Active Listening Critical Thinking Speaking Active Learning Coordination Writing Time Management Instructing Monitoring Learning Strategies Social Perceptiveness Service Orientation Complex Problem Identification Judgment and Decision Making Persuasion Mathematics Equipment Selection Troubleshooting Negotiation Management of Personnel Resources Operations Analysis Installation Equipment Maintenance Systems Analysis Systems Evaluation Quality control Technology Design Management of Financial Resources Science Repairing Operation and Control Operation Monitoring Management of Material Resources Programming
Total Openings (Projected Demand) 7,800 7,785 6,865 6,325 6,360 6,060 5,635 5,425 5,570 5,440 5,100 4,255 3,775 3,785 3,995 3,990 3,580 2,950 2,100 1,980 1,880 1,520 1,500 1,450 1,070 1,155 1,430 975 1,170 930 830 1,030 1,070 745 270
Replacement Index 55 55 55 54 55 55 55 54 55 55 55 54 52 54 55 56 54 56 55 61 61 53 55 56 48 51 57 50 61 53 60 62 66 63 46
Skills Gap Index 100 97 94 91 89 86 83 80 77 74 71 69 66 63 60 57 54 51 49 46 43 40 37 34 31 29 26 23 20 17 14 11 9 6 3
Source: Alabama Department of Industrial Relations.
State of the Workforce Report V: Region 2
UA/CBER
21
Table 2.17 Number of Selected Occupations by Education/Training Requirement Most Common Education/Training Requirements Categories First Professional Degree Doctoral Degree Master's Degree Work Experience Plus a Bachelor's or Higher Degree Bachelor's Degree Associate Degree Postsecondary Vocational Training Work Experience in a Related Occupation Long-term On-the-job Training Moderate-term On-the-job Training Short-term On-the-job Training
Selected High-Demand Occupations 4 0 3 4 16 4 2 2 0 4 1
Selected Fast-Growing Occupations
Selected High-Earning Occupations
4 0 4 1 7 7 3 0 0 4 4
12 3 5 13 15 1 0 1 0 0 0
Note: The last three education and training requirements categories are based on the length of time it generally takes an average worker to achieve proficiency for occupations in which postsecondary training is usually not needed for entry. Long-term requires more than 12 months on-thejob training that can include up to four years of apprenticeship, formal classroom instruction, and short-term employer-sponsored training. Trainees are generally considered to be employed in the occupation. Moderate-term requires one to 12 months on-the-job experience and informal training. Short-term requires up to one month on-the-job experience and training. Source: O*NET Online; Center for Business and Economic Research, The University of Alabama; and Alabama Department of Industrial Relations.
22
UA/CBER
State of the Workforce Report V: Region 2
Implications and Recommendations From a 2008 base, a worker surplus of 35,095 for 2018 and a worker shortfall of 11,893 for 2025 are expected (Table 2.18). Worker surplus may be somewhat overstated because of the expected impact of Base Realignment and Closures (BRAC) related troop increases and job opportunities at the Redstone Arsenal Military Facility in Huntsville. A focus on worker skills must be a priority through 2018, after which both skills and the expected shortfall must be priorities through 2025. Worker shortfalls for critical occupations will need to be addressed continuously through 2025 as well. Table 2.18 Expected Worker Shortfall Total population growth (percent) Age 20-64 population growth (percent) Job growth (percent) Worker shortfall (percent) Worker shortfall (number)
2008-2018 11.1 9.6 2.3 -7.3 -35,098
2008-2025 17.6 12.0 14.5 2.5 11,893
Note: Rounding errors may be present. Source: Center for Business and Economic Research, The University of Alabama.
Employment is critical to economic development and so strategies to address potential shortfalls must be adopted and implemented. Such strategies should aim at increasing labor force participation, encouraging in-migration, and raising worker productivity. Efforts to address the need for higher labor force participation, higher productivity, and faster labor force growth to meet workforce demand must include: (1) improvements in education and its funding; (2) continuation and enhancement of programs to assess, retrain, and place dislocated workers; (3) focus on hard-toserve populations (e.g. out-of-school youth); (4) lowering the high school dropout rate; (5) use of economic opportunities to attract new residents; (6) encouragement of older worker participation in the labor force; and (7) facilitation of in-commuting. Improving education is vital because a highly educated and productive workforce is a critical economic development asset. The educational and training requirements of high-demand, fastgrowing, and high-earning occupations show the significance of education in developing the workforce of the future. The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs demonstrates a strong need for training in these skills. The pace of training needs to increase for technical, systems, and complex problem solving skills; the scale of training should be raised for basic and social skills. Ideally, all high school graduates should possess basic skills so that postsecondary and higher education can focus on other and more complex skills while enhancing these basic skills. Employers should be an integral part of planning for training as they can help to identify future skill needs and any existing gaps. Education and training for the 20 sharp-declining occupations in Table 2.13 should slow accordingly. Another very important reason to improve education is that more educated people are more likely to work; data on worker participation and educational attainment show that labor force participation increases with worker education. Productivity also rises with education, which yields high private and social returns. Workforce development must view all of the education and other programs (e.g. adult education, career technical training, worker retraining, career readiness, etc.) as one system.
State of the Workforce Report V: Region 2
UA/CBER
23
Funding to support workforce development may require tax reform at state and local levels and must provide for flexibility as workforce needs change over time and demand different priorities. Programs to assess, retrain, and place dislocated workers—especially those affected by outsourcing and structural changes in the economy—should be continued and enhanced because they can improve the labor force participation rate. Hard-to-serve populations include persons in poverty, those receiving welfare, those in sparsely populated areas, and those on active parole. These populations are often outside of the mainstream economy and are in poverty. They usually have difficulty finding work because they have low levels of educational attainment, lack occupational skills, or face geographic or other barriers. They are a potential human resource and investment in training, transportation, child care, infrastructure, etc. may be needed to tap this resource. In-migration is one way of growing the labor force to fill the critical, specialized skill needs seen in some areas of Region 2. While the region’s population growth rate is above average, there is a strong need for workers with higher education and experience in science and engineering to meet the expected job demand. Higher employment demand could be partially served by in-commuting. However, new residents can be attracted using higher-paying job opportunities from the region’s economic development successes. Investment in amenities and infrastructure may be needed to support such growth. In-migration is generally more beneficial to a region than in-commuting since it grows the economy faster and adds to the tax base. Policies that facilitate and encourage older worker participation are needed as older workers can help meet the region’s workforce challenge. Such policies can be related to income taxation, job flexibility, and retirement programs. As the share of older people in the population is projected to increase (see Table 2.5), it becomes even more important that they be active in the workforce. Older worker participation has been rising nationally since the early 1990s. This has been attributed to reasons including: • • • • •
Older workers can work longer because they are healthier The number of physically demanding jobs is falling Defined contribution plans are replacing pensions There are fewer employer-paid retiree health insurance programs Social security reforms affecting those born after 1938 (i) gradually raise the normal retirement age from 65 to 67, (ii) increase the rate at which monthly payments rise with delayed benefits, and (iii) eliminate the reduction in benefits for those working beyond the full retirement age.
Diversifying the region’s economy will strengthen it. This demands that economic development also focus on retaining, expanding, and attracting businesses that provide more high-earning jobs. Current workers—including the underemployed—would welcome higher-earning opportunities. An economic development focus on diversification would require that workforce development pay attention to postsecondary and higher educational systems to ensure a ready and available workforce for new and expanding businesses. The higher incomes earned by graduates of these institutions would help raise personal income for the region and provide additional local (county and city) tax revenue. Raising personal income by improving educational attainment and technological skills is an effective economic development strategy even for a region that has relatively high population and labor force growth rates. Together, workforce development and economic development can build a strong, well-diversified economy. Indeed, one cannot achieve success without the other. 24
UA/CBER
State of the Workforce Report V: Region 2