Table of Contents. Introduction 1 Executive Summary 2 The Lane County Economy: Past, Present and Future 6 Industry Cluster Profiles 20

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2 Table of Contents Introduction 1 Executive Summary 2 The Lane County Economy: Past, Present and Future 6 Industry Cluster Profiles 20 Manufacturing 23 Health Care 27 Green Jobs 33 Software and Computer Systems Design 29 Scientific Research and Development 31 Skills for the Future 35 The Next Economy: A Regional Approach 39 Lane Workforce Partnership s Role in Creating the Next Economy 39 Consortia and Industry Networks 40 Preparing Youth for the Next Economy 42 Policy and Planning Recommendations

3 Introduction This third State of the Workforce Report builds on the work of prior reports published in 2006 and It has been revised with up-to-date information. The report provides an overview of the Lane County economy and labor market, and the workforce issues this region faces in preparing for a post-recession economy. The Report illustrates that a serious commitment to workforce development is essential to the region s vitality. Workforce development is economic development, and must be an integral part of planning to position Lane County to recover from the current recession and achieve sustainable economic prosperity. Lane Workforce Partnership, the workforce planning entity for the region, is on the front lines along with community and business leaders and education in forging a regional economic development action plan focused on the following overarching goal: By 2020, create 20,000 net new jobs in the chosen economic opportunity areas; reduce the local unemployment rate to, or below the state average; and increase the average wage to or above the state average. Lane Workforce Partnership invites the region s businesses, educational providers, government officials, and community based organizations to join Lane Workforce Partnership in its efforts and use this report as a means to engage in a regional dialogue about workforce and economic development. Chuck Forster Executive Director Lane Workforce Partnership LANE WORKFORCE PARTNERSHIP 1

4 EXECUTIVE SUMMARY Produced by Lane Workforce Partnership with assistance from the Oregon Employment Department, the State of the Workforce Report consolidates Lane County workforce and industry data, trends and analysis in one convenient place. This executive summary highlights the major findings. The complete report is available on the Lane Workforce Partnership website: The Lane County Economy Employment: Great Recession Brought Drastic Job Losses Between 2007 and 2009 the county lost 14,700 jobs, or 9.4 percent. This compares to 7.0 percent statewide. Construction and manufacturing were particularly hard hit. Construction lost 2,400 jobs (30 percent) and manufacturing lost 7,200 jobs (36 percent). In manufacturing, wood products lost 27 percent of its employment, and transportation equipment lost 80 percent from large losses in the local RV industry. The loss of high paying jobs in construction and manufacturing resulted in losses in the local service providing sector. Retail trade (-1,800), Information (-400), financial activities (-800) and professional and business services (-2,100) recorded the largest losses. By mid-2010 most industries have stabilized, but the only industries with over-the year growth are professional and business services (+200) and health care (+200). Lane County s economy is expected to rebound and grow into the future. Overall employment is expected to grow by 10 percent between 2008 and This is slower than previous ten-year forecasts since there is a known recession early in the forecast period. Lane County s growth rate is slightly faster than the statewide rate of 9 percent. Wages and Income: Stagnant Since 2004, real wages have stagnated in Lane County and even dropped slightly reaching $35,465 in Similarly, wages have stagnated and only grown slightly in the rest of the state since As a result, the wage gap between Lane County and the state in 2009 was 16 percent. Although the earnings of the average worker in Lane County were about $35,465 in 2009, many earned considerably less. Twenty-one percent of the jobs in Lane County were in occupations that averaged less than $25,000 while 61 percent were less than the overall average of $35,465. Most of the largest occupations in Lane County pay less than the average. Three of the largest: retail sales persons, cashiers, and food preparation and serving workers pay less than $28,000. Registered nurses and postsecondary teachers are the exception for large occupations, paying $73,818, and $81,634, respectively. LANE WORKFORCE PARTNERSHIP 2

5 Lane County Industry Cluster Spotlight Manufacturing Manufacturing in Lane County lost over 7,000 jobs from 2007 to 2009 and now comprises 9 percent of total nonfarm employment. Despite low growth projections in the forecast period, 3,750 openings are projected due to the need to replace workers who retire or leave the manufacturing workforce. The high need to replace workers is due in part to an older workforce in manufacturing about 50 percent of this Lane County workforce is between the ages of 45 and 64. This is well above the allindustry average of 41 percent, making manufacturing one of the older workforces in Lane County. Health Care In 2009, 17,300 people were employed in private sector health care. Health care employment is projected to grow 23 percent between 2008 and 2018 in Lane County and add 3,900 jobs, more than any other industry. About 50 percent of workers in health care are 45 years of age and older, creating many replacement openings as workers retire. Health care accounted for 12 percent of nonfarm employment in Lane County in 2009, a little more than usual due to employment losses in other sectors like manufacturing and construction. The 2009 average annual wage in health care and social assistance (wage for health care alone not available) was $42,207, compared to the county average of $35,465. Software and Computer Systems Design Software and computer systems design is a small cluster in comparison to health care and manufacturing. In 2009, covered employment (all employees covered under Oregon unemployment insurance) for this cluster was 2,015 with 162 businesses. This is about the same employment as 2007, but with a few more businesses. Employment in this cluster is projected to grow 11 percent between 2008 and 2018 in Lane County. The 2009 average annual wage was $64, percent higher than the county average. Scientific Research and Development The Eugene-Springfield metro area is a hub for scientific research and development in the social sciences. This cluster owes much of its growth to connections with the University of Oregon. Scientific research and development employment in Lane County is forecast to grow 20 percent between 2008 and This is well above the allindustry average of 10 percent. Average annual wages vary from around $30,000 for interviewers to nearly $90,000 for psychologists. Social science research assistants and psychologists are projected to account for nearly one-third of all new jobs in research. These occupations require bachelor s and master s degrees. LANE WORKFORCE PARTNERSHIP 3

6 Green Jobs Green jobs are not a cluster of industries or occupations based on the production of a common good or service, but rather jobs that are connected based on the principles of green development. Specific green jobs data is not available for Lane County, but the Oregon Employment Department completed a statewide survey of green jobs last year and found that Oregon had an estimated 51,402 green jobs in 2008, which accounted for 3 percent of Oregon s private and government employment. Lane Workforce Partnership has recently convened a Green Jobs Task Force to learn more about the local green sector and to identify relevant training and workforce needs. Skills for the Future Changes in the economy will continue to create demand for new and different skills. A lifelong learning strategy of continually building and refining an in-demand, transferable set of skills can be a way for workers to remain nimble in an ever-changing labor market. A list of skills projected to be in demand from 2008 to 2018 for low, medium and high wage jobs can be found in the full report. Creating the Next Economy: A Regional Approach Lane Workforce Partnership has had a long standing interest in working toward a shared regional identity and approach to economic and workforce development. To that end, the Partnership co-convened a Regional Prosperity Summit in November of 2009 and has been involved in a regional strategic planning process since that time. Lane Workforce Partnership plays a key role in supporting the local economy as an intermediary in monitoring business and industry s ever-evolving skill needs and local training and education s capacity to train residents to meet those needs. Much of this work is done through five industry consortia networks. Building a strong youth pipeline for occupations in demand in the future also contributes to the local economy. During summer 2009, with support from the American Recovery and Reinvestment Act, Lane Workforce Partnership operated a Youth Summer Jobs and Careers Program. Through a network of youth providers, 320 young people were placed in work experiences and internships Policy and Planning Recommendations More Summer Jobs and Career-Related Opportunities for Youth: Employment in the teen years is one of the best predictors of work readiness, future earnings and lifelong economic self-sufficiency. State and Federal funding for summer jobs programs for youth is critical. In addition to public sector support, local employers can help by championing the establishment of a summer jobs campaign for all Lane County youth. National Career Readiness Certificates: Lane Workforce Partnership supports National Career Readiness Certificates (NCRC). This is a nationwide system for certifying the essential skills necessary for success in over 16,000 jobs. Over 35 states LANE WORKFORCE PARTNERSHIP 4

7 have or are in the process of implementing these programs. NCRC testing is available at both WorkSource Lane Centers in Eugene and other WorkSource Oregon Centers throughout Oregon. Regional Collaboration: In order to recover from the recent recession, a regional approach is needed. Workforce development, education, business, economic development and community leaders must work together toward a shared vision of economic recovery and future prosperity. Support Middle Skill Jobs: Middle skill jobs are those that require more than a high school diploma, but less than a four year degree. There must be a concerted effort to educate the community about these job opportunities and encourage business development that supports middle skills job creation. On the Job Training, A Job Crea3on Strategy On-The-Job-Training (OJT) is an important strategy in the skilling up of America s workforce. Financial reimbursement to participating employers is likely to lead to job creation especially when coupled with initiatives like BOOST Oregon (Building Opportunities for Oregon Small Business). The Lane Workforce Partnership began offering OJT July 1, Skilling Up Even More Important in a Down Economy Youth, the unemployed, and current workers must continue to upgrade their skills in order to maintain viability in the labor market. Oregon is one of a few states that does not invest in skilling up its current workforce, relying almost solely on federal funds through the Workforce Investment Act. Oregon will not transition to a greener more prosperous economy without an investment in the training of today s workforce. A State investment is essential. Grow Wages and Income Sixty-one percent of Lane County residents earn less than the county s average wage of $35,465. The wage gap between Lane County and the rest of the state was sixteen percent in Twenty-one percent of Lane County jobs pay less than $25,000 per year. Government and business must work together to grow local wages and income. LANE WORKFORCE PARTNERSHIP 5

8 The Lane County Economy: Past, Present and Future Prior to the downturn of the early 1990s Lane County s economy was much more dependent on the wood products industry. During the expansion of the 1990s, the area added high-tech companies such as Symantec and Datalogic. In addition, industries such as food product manufacturing and health care have continued to add jobs. As a result, Lane County s economy is more diverse. The University of Oregon and other state and federal government jobs add to that diversity. (see Figure 1) During the economic expansion of the 1990s, the region s 20.1 percent job growth rate was close to the national rate of 19.6 percent. The unemployment rate in Lane County tracked well with the national rate until the second half of the decade. By 2000 the national rate dropped to a low of 4.0 percent compared to the county rate of 5.4 percent. Although the economic recession of did not affect Lane County as severely as other areas of the state, the annual average unemployment rate rose to 8.0 percent by 2003 (compared to 8.1 percent statewide and 8.3 percent in the Portland area). The region lost 3,200 jobs over the recessionary period. More than half of the job losses were in a broad array of manufacturing industries. Lane County Employment, April 2010 Construction 4% Mining and Logging Manufacturing 1% 9% Wholesale trade 4% Retail trade 13% Information 3% Government 24% Leisure and Hospitality 11% Financial Activities 5% Professional and Business Services 10% Educational and Health Services 16% Figure 1: Lane County Employment LANE WORKFORCE PARTNERSHIP 6

9 Percent Annual Averge Unemployment Rates Figure 2: Annual Average Unemployment Rates Growth rebounded in 2004 and continued into 2007 with the addition of 11,700 jobs and an annualized growth rate of 2.0 percent. Many of the losses in manufacturing were recovered. Many of the new manufacturing jobs were in the recreational vehicle-heavy transportation equipment manufacturing industry, which added 1,000 jobs between 2003 and The recovery was also broad-based. Other industries adding notable growth between 2004 and 2007 include construction (+1,300), wholesale trade (+600), retail trade (+1,600), information (+600), financial activities (+700), health care (+1,600) and leisure and hospitality (+1,500). After peaking in 2007, the county saw drastic job losses during what is commonly known nationally as the Great Recession. Between 2007 and 2009 the county lost 14,700 jobs, or 9.4 percent. This compares to 7.0 percent statewide. Construction and manufacturing were particularly hard hit. Construction lost 2,400 jobs (30 percent) and manufacturing lost 7,200 jobs (36 percent). In manufacturing, wood products lost 27 percent of its employment and transportation equipment lost 80 percent from large losses in the local RV industry. The loss of high United States Oregon Lane County paying jobs in construction and manufacturing resulted in losses in the local service providing sector. Retail trade (-1,800), Information (-400), financial activities (-800) and professional and business services (-2,100) recorded the largest losses. There were two bright spots during the great recession period. The first, health care, added 1,000 jobs due in part to the addition of the new RiverBend Hospital. The only other industry to add jobs was food and beverage manufacturing, which only added 189 jobs (11 percent) largely due to the addition of two craft brewers, Ninkasi Brewing and Hop Valley Brewing. So far in 2010, the May figures show employment growth has turned slightly positive. Seasonally adjusted payroll employment has improved three out of five months for a net gain of 600 jobs. The overthe-year unemployment rate has declined 2.0 percentage points to 10.7 percent. Most industries have stabilized, but the only industries with over-the-year growth are professional and business services (+200) and health care (+200). Lane County s economy is expected to rebound and grow into the future. Overall employment is expected to grow by 10 percent between 2008 and This is slower than previous ten-year forecasts since there is a known recession early in the forecast period. Lane County s growth rate is slightly faster than the statewide rate of 9 percent. LANE WORKFORCE PARTNERSHIP 7

10 Highlights for industries over the forecast period include: Construction is expected to rebound from the recession, but not to the 2008 level, losing 200 or -3 percent over the forecast period. Manufacturing declines over the forecast period (-400, -2 percent). Much of the loss is incurred between 2008 and 2009, especially in transportation equipment, and does not rebound to 2008 levels. Wholesale trade (+700, 11 percent) is helped by electronics and Lane county s position along I-5. Retail trade (+1,800, 9 percent) adds jobs, but only after rebounding from the recession, especially auto dealers. Lane County Industry Employment Forecast, Change % Change Total payroll employment 154, ,400 15,000 10% Total private 124, ,500 11,700 9% Natural resources and mining 2,100 2, % Mining and logging % Construction 7,300 7, % Manufacturing 17,700 17, % Durable goods 13,700 13, % Wood product manufacturing 4,100 4, % Transportation equipment manufacturing 3,000 2, % Nondurable goods 4,000 4, % Trade, transportation, and utilities 28,400 31,200 2,800 10% Wholesale trade 6,100 6, % Retail trade 19,200 21,000 1,800 9% Transportation, warehousing, and utilities 3,100 3, % Information 3,800 3, % Financial activities 8,300 8, % Professional and business services 15,600 17,700 2,100 13% Administrative and support services 7,700 8, % Educational and health services 21,400 26,100 4,700 22% Health care and social assistance 19,800 24,400 4,600 23% Health care 16,900 20,800 3,900 23% Leisure and hospitality 15,000 16,900 1,900 13% Accommodation and food services 12,900 14,500 1,600 12% Food services and drinking places 11,400 12,800 1,400 12% Other services 5,200 5, % Government 29,600 32,900 3,300 11% Federal government 1,700 1, % State government 11,500 13,500 2,000 17% State education 9,000 9, % Local government 16,400 17,700 1,300 8% Local education 9,200 9, % Table 1: Lane County Industry Employment Forecast LANE WORKFORCE PARTNERSHIP 8

11 Professional and business services adds (2,100, 13 percent). Although a major portion of this growth is expected to come from continued growth in temporary help firms; their rapid market penetration of the past decade has slowed. Another major portion, call centers, should also continue to add jobs. Private education and health care has the strongest sector growth. The majority of that growth will come from health care (3,900, 23 percent) due to demand from a growing and aging population. Leisure and hospitality grows (+1,900, 13 percent) from growth in recreation, new hotels and restaurants. Government is expected to grow more quickly than the overall economy at 11 percent. Federal government is expected to remain flat. State government grows rapidly adding (2,000, 17 percent) from state education and an expected new mental hospital in Junction City. Local government also adds jobs, helped by tribal employment. Even in industries that are expected to grow slowly or decline, there still will be opportunities created by replacement needs. Replacement needs are created when someone permanently leaves an occupation and does not include regular turnover. A permanent change to a different occupation, retirement and death are some common reasons for the creation of replacement openings. As the population ages and retirements increase, the level of replacement openings will increase. Lane County Projected Job Openings by Industry Growth and Replacement, Government Educational and Health Services Retail Trade Leisure and Hospitality Professional and Business Services Manufacturing Financial Activities Wholesale Trade Other Services Growth Openings Replacement Openings Construction Information Transportation and Utilities Natural Resources and Mining 0 2,000 4,000 6,000 8,000 10,000 12,000 Note: Growth openings are the net number of job openings created by economic expansion. Occupations with declining employment have zero growth openings. Figure 3: Lane County Projected Job Openings by Industry LANE WORKFORCE PARTNERSHIP 9

12 Education and health care is the only major industry group where growth is expected to outpace replacement needs, as shown in Figure 3. Replacement openings are particularly important to provide opportunity for occupations in manufacturing and construction, which are expected to grow more slowly than other industries. Wages and Income After bottoming out in 1990 with the loss of high wage timber jobs, real average wages steadily increased until peaking in 2004 at $35,592 up $3,452, or 11 percent. The addition of high tech manufacturing and stabilization in wood products helped turn wages in a positive direction in Lane County, but not enough to keep the wage gap with the rest of the state from expanding. In 1990, Lane County wages were 10 percent less than the rest of the state. By 2000 the gap had expanded to 19 percent, largely due to rapid growth in high tech manufacturing in the Portland area. The economic downturn that lasted from 2001 through 2003 was particularly hard on the high tech manufacturing industry. Although Lane County had some losses in high tech, its other industries were relatively stable. On the other hand, the Portland area s economy was more high tech manufacturing dependent, leading to large losses of high paying jobs. Correspondingly, the wage gap between Lane County and the rest of the state dropped to 15 percent by Real Average Annual Wages $45,000 $40,000 $35,000 $30,000 $25,000 Region 5 Rest of Oregon $20,000 Source: Oregon Employment Department Figure 4: Real Annual Wages LANE WORKFORCE PARTNERSHIP 10

13 Since then, real wages have stagnated in Lane County and even dropped slightly reaching $35,465 in Similarly, wages have stagnated and only grown slightly in the rest of the state since As a result, the wage gap in 2009 was 16 percent. (see Figure 4) An industry mix, made up of lower paying industries, compared to the Portland area explains some of the wage gap between Lane County and the rest of the state. Additionally, quality of life issues, such as less congestion and proximity to outdoor recreation, may lower wages for any particular occupation. Although difficult to Largest Occupations and Highest Paying Occupations in Lane County: Employment Largest Occupations Retail Salespersons 5,270 Cashiers 3,569 Combined Food Preparation and Serving Workers, Including Fast Food 3,390 Office Clerks, General 3,219 Registered Nurses 2,806 Bookkeeping, Accounting, and Auditing Clerks 2,565 Waiters and Waitresses 2,410 Teacher Assistants 2,264 Janitors and Cleaners 2,061 Truck Drivers, Heavy and Tractor-Trailer 1,986 Laborers and Freight, Stock, and Material Movers, Hand 1,901 Customer Service Representatives 1,873 Office and Administrative Support Workers, All Other 1,830 Secretaries, Except Legal, Medical, and Executive 1,773 Postsecondary Teachers, Except Graduate Teaching Assistants 1,719 Highest Paying Occupations Pharmacists 325 Engineering Managers 107 Sales Managers 263 Physician Assistants 76 Judges and Magistrates 28 Financial Managers 337 Computer and Information Systems Managers 186 General and Operations Managers 1,568 Postsecondary School Administrators 167 Computer Software Engineers, Systems Software 60 Industrial Production Managers 200 Psychologists, All Other 97 Human Resources Managers, All Other 95 Purchasing Managers 67 Electrical Engineers 85 Source: Oregon Employment Department Table 2: Largest Occupations and Highest Paying Occupations LANE WORKFORCE PARTNERSHIP 11

14 quantify, employers may be able to offer lower wages because Lane County is a desirable location in which to live. In addition, the high proportion of college students in the county likely will accept lower wages for any particular occupation out of Lane County Employment Forecast by Earnings (Total Openings ) High (above $50,000), 9,587 Mid ($30,000 to $50,000), 13,959 Figure 5: Employment Forecast by Earnings. Oregon Employment Department Per Capita Personal Income (Inflation Adjusted, 2008 $s; Bureau of Economic Analysis) U.S. need. Although the earnings of the average worker in Lane County were about $35,465 in 2009, many earned considerably less. Twenty-one percent of the jobs in Lane County were in occupations that averaged less than $25,000 while 61 percent were less than the overall average Oregon Low (below $30,000), 23,910 Lane Workforce Analysis of $35,465. Most of the largest occupations in Lane County pay less than the average. Three of the largest: retail sales persons, cashiers and food preparation and serving workers pay less than $28,000. Registered nurses and post-secondary teachers are the exception for large occupations, paying $73,818, and $81,634, respectively. (see Table 2) More job openings over the next decade are in the lower paying occupations. Jobs paying over $50,000 a year are expected to grow by 33 percent, adding about 10,000 total openings, 11 percent of those from growth. In comparison, jobs paying less than $30,000 will grow by 39 percent, adding about 24,000 total openings, also 11 percent from growth. Total openings in higher paying jobs are due to replacement needs from increasing retirements of experienced workers. (see Figure 5) Figure 6: Per Capita Personal Income 7/26/2010 Personal Income In late April, 2010, the U.S. Department of Commerce, Bureau of Economic Analysis LANE WORKFORCE PARTNERSHIP 12

15 released its 2005 estimates of personal income for substate areas (counties and townships). Personal income includes all forms of income earnings by place of work, dividends, interest and rent, and government transfer payments. Lane County s total personal income grew by approximately $327.3 million between 2007 and 2008 to reach $11.7 billion, a 2.9 percent increase. When the data are adjusted for inflation; however, total personal income decreased by $45.1 million, or 0.4 percent. Inflation adjusted personal income also dropped between 2006 and 2007 by $62.7 million (-0.5 percent). Before then, it had not dropped since the recession in (see Figure 6) The components of personal income for Lane County show that 59 percent is from earnings, 22 percent from dividends, interest and rent, and 19 percent from transfer payments, primarily in the form of Social Security and Medicare. At the national level, 67 percent of personal income is from earnings, 18 percent is from dividends, interest, and rent, while transfer payments make up around 15 percent. Statewide, 63 percent of personal income is from earnings, 20 percent from interest, dividends, and rent, and 16 percent from transfer payments. It is likely that Lane County s higher portion of income from dividends, interest and rent is from rentals associated with the University of Oregon and the coast. The higher portion in transfer payments is likely due to a higher level of retirees. Lane County s real (inflation adjusted) per capita personal income (PCPI) has dropped for two years because of recession (Figure 6). Between 2006 and 2007 it dropped $740 or 2.1 percent. Between 2007 and 2008 it dropped $480 or 1.4 percent to reach $33,520. Before then, it had not dropped since Statewide, real PCPI dropped $210 (-0.6 percent) in 2007 and $540 (-1.5 percent) in Statewide, real PCPI last declined in 2001 during a recession that was a correction in high-tech industries. At the national level, real PCPI increased $300 (0.7 percent) in 2007 and declined $510 (-1.3 percent) in Employment Projections by Educational Requirement Percent of Required Education Level Employment Employment 2018 Jobs Percent Growth Total Occupations 154, , % OJT and work experience 103, , % 8.9% Post-secondary and Associate's 20,906 23, % 13.5% Bachelor's 22,612 24, % 8.6% Master's, Professional and Doctorate 5,435 6, % 15.5% Ed. Requirement not listed 1,846 2, % 9.5% Competitive Education Level Related work experience 63,480 68, % 8.2% Postsecondary training 32,331 35, % 9.6% Associate 17,503 19, % 12.2% Bachelor's 24,910 27, % 11.3% Master's, Professional and Doctorate 14,402 16, % 11.1% Source: Oregon Employment Department Table 3: Employment Projections by Educational Requirement LANE WORKFORCE PARTNERSHIP 13

16 Relative to other areas, Lane County s per capita personal income remained 87 percent of the statewide and rose slightly to 78 percent of the U.S. Lane County s per capita personal income now ranks 11th among Oregon s 36 counties. Projected Educational Requirements The majority of jobs in Lane County require little in the way of training or education, but the fastest growing occupations require post secondary education and training. The minimum required education for almost 67 percent of positions in 2018 will require only on-the-job training or work experience. Many of these jobs are in lower paying services and retail occupations. These jobs are expected to grow more slowly at 8.9 percent than many other occupations. Jobs that require an associate s degree or other postsecondary training are expected to grow 11.9 percent while those requiring a professional or graduate degree will grow by 15.5 percent. To be competitive, job seekers will increasingly be required to attain higher degrees. Jobs requiring a bachelor s degree to be competitive will grow by 11.3 percent compared to 8.2 percent for work experience. (see Table 3) Lane County Take Home Messages for Educational Requirements About 36 percent of Lane County s projected growth and replacement job openings will require post-secondary education or more as the minimum educational requirement slightly higher than statewide. A little over half (53.1 percent) of those openings will require post-secondary education from candidates who want to be really competitive for the positions slightly higher than statewide. And for high-demand, high-wage occupations: 60 percent of the highdemand, high-wage job openings require post-secondary education or more, as a minimum lower than statewide. Growth in health care and state education make the overall need for post-secondary education slightly higher in Lane County. Prevalence of manufacturing, logging and other blue-collar openings, mostly through replacement, makes the need for post-secondary education slightly lower for high-wage, high demand occupations in Lane County. Higher Education Institutions Located in Lane County University of Oregon Lane Community College Gutenberg College Northwest Christian University Eugene Bible College LANE WORKFORCE PARTNERSHIP 14

17 Figure 7 U.S. Unemployment Rates & Median Weekly Earnings by Educational Attainment (age 16+) $1,600 20% $1, Median Weekly Earnings 18% Median Weekly Earnings ($) $1,200 $1,000 $800 $600 $ Unemployment Rates 16% 14% 12% 10% 8% 6% 4% Umemployment Rates (%) $200 2% $- All Persons (16+) <HS Diploma HS Diploma Some College Assoc. Degree Bach. Degree Master's Prof. Degree Doctorate 0% Source: U.S. Dept of Labor, Bureau of Labor Statistics Figure 7: US Unemployment Rates & Median Weekly Earnings by Education A Highly Educated Population Data for the U.S. shows a direct correlation between education levels and earnings and unemployment. Generally, the higher the education level, the higher the pay and the lower the chances of being unemployed. As Figure 7 shows, people with less than a high school diploma averaged $431 in weekly earnings and an unemployment rate of 18.2 percent in 2009 while people with a bachelor s degree had $994 in weekly earnings and a 4.8 percent unemployment rate. Lane County s educational attainment levels have increased over the past decade. The share of the 25 and older population with less than a high school degree declined from 17 percent in 1990 to 10 percent in 2008, while the share with a bachelor s degree or higher increased from 22.2 percent to 27 percent. These percentages compare favorably with those from Oregon and the U. S. (Table 4). In 2008, the percentage of the population 25 and older with less than a high school diploma was lower in Lane County (10 percent) than Oregon (11. percent) and the U.S. (15 percent). The population with a bachelor s degree or higher was about the same in Lane County at 27 percent compared to 28 percent for Oregon and 28 percent for the U.S. (see Table 4) Educational Attainment in Population 25 Years and Older Region 5 Oregon United States % less than high school 10.2% 11.4% 15.1% % high school grad or higher 89.8% 88.6% 84.9% % associate's degree 8.7% 8.2% 7.5% % bachelor's degree or higher 27.2% 28.1% 27.7% Source: American Community Survey Table 4: 2008 Educational Attainment in Population 25 years and older LANE WORKFORCE PARTNERSHIP 15

18 10% Percent of Population 9% 8% 7% 6% 5% 4% 3% 2% Region 5 Oregon 1% 0% Under 5 5 to 9 10 to to to to to to to to to to to to to to to Source: Portland State University, Population Research Center Region 5 includes Lane County Age Class Figure 8: Age Distribution 2009, Lane County and Oregon Demographics The 2009 population estimates indicate that Lane County is the fourth most populous county in Oregon and the third most populous metropolitan statistical area (MSA) after the Portland and Salem areas. The county s 343,140 residents are concentrated within a relatively small region around the Eugene/Springfield urban area. Seventy percent of the county s residents live in incorporated cities within a 30 mile radius of Eugene, largely along Interstate 5. Lane s other population centers outside of the Eugene/Springfield area include the corridor between Florence and Dunes City on the Pacific Coast, and the Oakridge/West Fir area in the Cascade foothills. Lane County s population grew at a rate of 14.2 percent from 1990 to This was below the statewide rate of 20.4 percent, and ranked Lane County 17th fastest growing out of Oregon s 36 counties. Since 2000 the county has grown 7.7 percent compared to 11.8 percent statewide ranking it 16th fastest growing area. Long-term projections indicate that the county s population should continue to increase, but the rate of growth should slow and remain below the projected statewide growth rate. According to forecasts by the Oregon Department of Administrative Services, Office of Economic Analysis, the total increase in Lane County s population in the 20-year period between 2005 and 2025 is expected to amount to roughly 75,300 people, or 23 percent compared with 28 percent growth statewide. In-migration Drives Population Growth In-migration has been the driving force behind population growth in Lane County for the past decade. Strong economic growth in Oregon throughout much of the decade accompanied by recession in surrounding states, particularly California caused a wave of in-migration. For most of the 1990s, net migration (in-migration less outmigration) outpaced the natural increase (births less deaths). Of the population increase between 1990 and 2000, roughly 13,000 was due to natural increase while LANE WORKFORCE PARTNERSHIP 16

19 Lane County Share of Working-age Population 35% 30% 25% 20% 15% 10% 5% 0% Figure 9: Lane County Share of Working-age Population 32,000 was due to net migration. The peak year of net migration during the 1990s was 1997, with a gain of 4,600. Since then, net migration has slowed, reaching a low of 550 during the depth of the recession in Between 2000 and 2009 net migration again outpaced natural increase. Net migration added 18,457 people, while natural increase added 6,274 people. An Aging Population The age distribution of Lane County s population has a higher proportion of its population in the youngadult (20-29) age group. The higher concentration of young adults can be easily explained by the fact that the University of Oregon and Lane Community College enroll thousands of out-ofcounty people estimates run as high as 10,000 during a typical school year. As Figure 8 shows, the statewide and county age distributions have two distinct high points, the age groups that include 40 to 59 year olds and the age groups that include 15 to 29 year olds. The former represents the baby-boom generation and the latter the echo of the baby boom. While boomers are starting to reach early retirement age, the echo is just entering the workforce. The result may be a temporary skill shortage as more people retire than there are skilled people to replace them. How serious this skill gap will become is uncertain, but the aging of the baby boomers should create opportunities for younger people who develop the right skills and education. Among the working age population, aging trends are driven by the baby boom generation those born between 1946 and As LANE WORKFORCE PARTNERSHIP 17

20 Figure 9 shows, in 1970, before most babyboomers entered the workforce, the share of the 45 to 64 year olds of the working-age population was around 27 percent. As young workers entered the workforce, the workingage population became much younger, with the age group falling to a little over 20 percent of the working-age population. As the baby-boom generation has aged, so has the workforce. The share rose from 23 percent to 30 percent of the working age population by It is expected to peak at 32 percent in 2010 and then level off at around 28 percent, increasing slightly out to Although the echo-boomers and in-migration will help lower the age group s share of the working age population and help close any skill or labor gaps that develop in the future, the overall aging of the population will have an impact on the economy. As the baby-boomers age, there is expected to be more demand for health care services and possibly labor shortages in several industries. Forecasts show that the level of those who potentially will exit the labor force will gain compared to the level of those who are potential entrants, increasing the likelihood of a labor shortage. Lane County s high population of college aged students helps keep the entrant category well supplied. However, most students attending the University of Oregon will not be permanent residents. The college student population will help keep short-term positions filled, but there may be shortages in positions requiring a long-term commitment. In addition to population trends, labor force participation rates the percentage of individuals working or actively looking for work may affect labor and skill availability. National trends show a steady drop in younger worker s (ages 16 to 24) labor force participation, dropping from 68.1 percent in 1980 to 56.9 percent in A higher Hispanic Share of Population by Age, % 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Under yrs yrs. 65+ yrs. Source: Census Bureau Figure 10: Hispanic Share of Population by Age LANE WORKFORCE PARTNERSHIP 18

21 premium on a college education and competition from immigrants, dislocated workers and older workers are two likely reasons for the drop. On the other end of the age spectrum, older worker s labor force participation has been on the rise. For workers age 55 and up, the participation rate has increased from 32.8 percent to 40.0 percent. Economic need and better health in the retirement years are likely reasons for the rise. If these trends continue, less young workers in the labor force may increase the likelihood of a labor shortage while more older workers lessen the likelihood of a skill shortage. Industries that have high proportions of older workers may experience labor or skill shortages in the coming years. In 2009, at the broadest industry level, many industries such as mining and logging (63 percent), transportation and warehousing (61 percent) and utilities (56 percent) have over half of their workers in the 45 and higher age group. Occupations in health care and social assistance (49 percent), management of companies and enterprises (48 percent), and educational services (48 percent) have the highest proportion of workers in the 45 and higher age group. Race and Ethnicity Minority racial and ethnic proportions in Lane County are similar to the statewide proportions. In 2008, Lane County was 91.7 percent white, compared with 90.1 percent statewide. The next highest racial category in the county is Asian, at 2.9 percent. The reported Hispanic and Latino ethnicity was 6.4 percent in Lane County in 2008, compared with 11.0 percent statewide. in Lane County, it is the fastest growing segment, growing by 117 percent between 1990 and 2000 to reach 14,874. The latest estimate from the U.S. Bureau of Census puts the Lane County Hispanic population at 22,250 in 2008, a 50 increase over the eightyear period. The impact of this ethnic group will continue into the future because of its age structure (Figure 10). While Hispanics in Lane County account for a little less than six percent of the working age population in 2008, they account for around 14 percent of the under five population and about 11 percent of the school age population. Therefore, the Hispanic population will continue to grow as a part of the school age and working age population into the future. (see Figure 10) Hispanic Population Although the Hispanic population only makes up 5.9 percent of the total population LANE WORKFORCE PARTNERSHIP 19

22 Industry Cluster Profiles What are Industry Clusters? Industry cluster development is an integral part of the Oregon Business Plan and the Governor s vision for a statewide workforce investment system. Industry clusters are defined by the Oregon Business Plan as groups of similar and related firms in a defined geographic area that share common markets, technologies, worker skill needs, and which are often linked by buyer-seller relationships. 1 Firms and workers in an industry cluster benefit from their proximity to each other. A strong industry cluster builds a skilled workforce, specialized suppliers, a shared base of knowledge, and ultimately, a comparative advantage and more opportunities for growth. Firms in the traded sector (firms that sell the majority of their products and services outside of local markets) comprise the base of industry clusters because they build wealth in communities. Traded sector firms are commonly found in manufacturing, natural resources, wholesale trade, and some service sectors, but they can also be found in other industries depending on the characteristics of the firm and local economy. One way to help identify industry clusters is to calculate location quotients by industry. Location quotients tell us how much more or Lane County Industry Wages and Forecast Employment Growth, Average Annual Pay (Lane County = $35,363) $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Below Average Job Growth, Above Average Wages Construction Manufacturing Natural Resources & Mining Trade, Transportation & Utilities Below Average Job Growth, Below Average Wages Other Services Information Financial Activities Government Above Average Job Growth, Above Average Wages Professional & Business Services Leisure & Hospitality Educational & Health Services Above Average Job Growth, Below Average Wages -10% -5% 0% 5% 10% 15% 20% 25% 30% Source: Oregon Employment Department Projected Employment Growth (Lane County Average = 10%) Figure 11: Lane County Industry Wages and Forecast Bubble Graph 1 Oregon Business Council, What Are Clusters? 13 January LANE WORKFORCE PARTNERSHIP 20

23 less industry employment an area has compared to a different area. In most cases, location quotients mentioned in this report compare Lane County with the U.S. A location quotient of 1.0 means an area has the same percentage of employment in a particular industry as the comparison area. Location quotients over 1.0 point to industries with higher concentrations of employment in an area that may be indicative of an industry cluster. Lane County Industry Cluster Spotlight The State of Oregon, the Lane Workforce Partnership, and local economic development agencies in Lane County have focused on identifying and working with targeted industry clusters for the past several years as a means of strengthening the state and local economy. Identifying and targeting priority industries is not an exact science. Industry data such as number of firms, number of employees, projected growth, average wage and the concentration of an industry in an area are part of the picture. Other factors that are considered from a workforce perspective include: support for specific occupations within industries that are in-demand and offer higher than average wages industries that offer strong career ladders that allow entry-level employees to progress a focus on skill sets that have a high degree of transferability among different employers and industries Average Annual Pay of Lane County Industry Clusters, 2009 Software and Computer Systems Design Manufacturing Health Care and Social Assistance Scientific Research and Development Lane County Average Source: Covered Employment and Wages, Oregon Employment Department Software and Computer Systems Design Scientific Research and Development Source: Oregon Employment Department Lane County industry clusters profiled in the 2010 State of the Workforce Report include: Manufacturing Health care Software and computer system design Scientific research and development Green jobs $0 $20,000 $40,000 $60,000 $80,000 Projected Employment of Lane County Industry Clusters Manufacturing Health Care ,000 10,000 15,000 20,000 25,000 Figure 12 (top): Average Annual Pay of Lane County Clusters Figure 13: Projected Employment of Lane County Clusters LANE WORKFORCE PARTNERSHIP 21

24 Projected Job Openings of Lane County Industry Clusters, Health Care and Social Assistance Manufacturing Software and Computer Systems Design Scientific Research and Development Growth openings Replacement openings 0 2,000 4,000 6,000 8,000 10,000 Source: Oregon Employment Department Figure 14: Projected Job Openings of Lane County Clusters Location Quotients of Lane County Industry Clusters U.S. Base Area, Private Ownership, Lane County Oregon 1 Location Quotient Manufacturing Health care and social assistance Software and computer systems design Scientific research and development Source: Oregon Employment Department Figure 15: Location Quotients of Lane County Clusters LANE WORKFORCE PARTNERSHIP 22

25 Manufacturing Lane County maintains a strong, diversified manufacturing sector. Location quotients of 1.06 and 1.22 compared to Oregon and the U.S. indicate a higher concentration of manufacturing employment in Lane County, especially compared to the U.S. Manufacturing is an important industry because it is traded sector, pays above average wages, and expects to provide many replacement job openings for workers between 2008 and In 2009, manufacturing employed 12,600 people in Lane County, which equaled 9 percent of total nonfarm employment. Manufacturing employment is down significantly from just two years ago when it employed 19,800 people and accounted for 13 percent of total nonfarm employment. While this past recession caused great job losses in manufacturing, the forthcoming recovery is expected to add back jobs in manufacturing. This is part of the cyclicality that comes with manufacturing, and in particular, durable goods manufacturing. One durable goods subsector, though, that may not recover as well as others is transportation equipment. Up until the recession, transportation equipment was the second largest manufacturing subsector behind wood products in Lane County. Recreational vehicle manufacturers dominated employment in transportation equipment. In 2005, employment in this subsector peaked at 4,500, but plummeted to 800 by During the recession, one major manufacturer closed and another went into bankruptcy and was acquired with a reduced workforce. While growth in transportation equipment may return postrecession, it will likely be much smaller than it was just three years ago. Ten-year employment projections for paint a bleak picture for manufacturing growth, partly due to the projection capturing a majority of job losses from this past recession. Manufacturing employment is forecast to decrease by 2 percent between 2008 and That forecast should improve when projections are published because 2010 average annual employment will likely represent the lowest average annual employment of manufacturing from the recession. Despite the lack of manufacturing employment growth in the forecast, 3,750 job openings are projected due to the need to replace workers who retire or leave the manufacturing workforce. The high need to replace workers is due in part to an older workforce in manufacturing about 50 percent of this Lane County workforce is between the ages of 45 and 64. This is well above the allindustry average of 41 percent, making manufacturing one of the older workforces in Lane County. Even with an improved growth forecast for , these replacement openings will provide the majority of job opportunities in manufacturing for the foreseeable future. Figure 16 shows employment size and average annual wage of Lane County s largest manufacturing subsectors. Wood product manufacturing is by far the largest LANE WORKFORCE PARTNERSHIP 23

26 Lane County Manufacturing Subsectors by Employment Size and Wage $90,000 $80,000 $70,000 Paper Chemical $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 Computer/Electronics Machinery Transportation Misc Food Furniture Metal Wood Products $ ,000 1,500 2,000 2,500 3,000 3,500 4,000 Source: Oregon Employment Department Figure 16: Lane County Manufacturing Subsectors Bubble Graph subsector, with over twice as many employees as the next largest subsector, food. Wood product, food, and the third largest subsector, machinery, account for 50 percent of manufacturing employment in Lane County. These three subsectors are profiled later in this section. Transportation equipment and computer and electronic products, the second and third largest subsectors in 2007, were the fifth and eighth largest subsectors in Chemical manufacturing, the seventh largest subsector, includes Lane County s largest biotechnology company, Molecular Probes. Most jobs in manufacturing require on the job training. These jobs generally provide good wages for workers that do not have postsecondary education and training. There are many jobs, though, that do require postsecondary training, apprenticeships, or bachelor s degrees. These jobs pay better and are in demand in the manufacturing industry. Table 5 (in Appendix B) shows the mix of high wage, high demand occupations in manufacturing. Following is a summary of the latest local manufacturing survey conducting by Lane Workforce Partnership. LANE WORKFORCE PARTNERSHIP 24

27 Local Manufacturing Survey Results Since 2007, Lane Workforce Partnership has administered an annual manufacturing survey in order to learn more about how local manufacturers view and are responding to workforce issues. The survey is modeled on a National Association of Manufacturers survey. Thirty-five Lane County manufacturers responded to the 2009 survey, representing all significant manufacturing sub-sectors in Lane County, including wood products, transportation, metals, computer/electronics, machinery, food processing, chemicals, and plastics. Respondents also represented a balance of small and larger business sizes. The number of responses in the past three years has ranged from 31 to 35 out of roughly 100 polled. A question was added this year asking manufacturers to report on the specific impacts of the recession on their business decisions related to their workforce. Over 70 percent percent reported that they had reduced personnel and almost half reduced wages. Thirtyeight percent reduced benefits. Not surprisingly, the recession has reduced concerns about worker shortages in the survey. Those citing difficulty in finding skilled applicants for open positions dropped from a high of 65 percent in 2007 to 46 percent in However, a remarkably high number of respondents (68 percent) still remain concerned about future shortages of skilled, technician-level workers. The top two skills manufacturers chose as being those that their employees would need more of in the coming years included Computer Skills, which leapt from 41 percent in 2008 to 65 percent this year and Lean Manufacturing/High Performance Skills (59 percent). Health care benefits (62 percent) and in-house training programs (59 percent) still ranked highest as being especially helpful in recruiting and retaining a qualified workforce. Improving Organizational Culture jumped to third place from fifth place last year, while strategies such as Increased Wages and Career Ladder/Promotional Opportunities dropped significantly. Efforts to reduce turnover among current employees (52 percent) and Efforts to change attitudes about manufacturing jobs (49 percent) ranked highest among recruitment and retention strategies companies would like to utilize in the future. A lean/high performance workforce (77 percent) and new product innovation (56 percent) were cited as the most important to their company s success over the next three years. High Tax Burden was ranked as the most significant barrier to business expansion by 40 percent of respondents, up from a low of 10 percent in This is perhaps due to the business tax measure on the ballot at the time the survey was released. High Tax Burden was followed by High Cost of Labor, cited by 37 percent, up from 19 percent in Several cited lack of access to capital and the economy in the comments section. Sixty-one percent of respondents who are facing current skills shortages in their workforce cited that these shortages have resulted in Reduced Production Output/Sales and Reduced Overall Productivity. On the bright side, Reduced Product or Service Quality fell to 17 percent from a high of 40 percent in The complete survey is available at and and in Appendix A of this publication. LANE WORKFORCE PARTNERSHIP 25

28 Wood Products Wood product manufacturing, logging, and related industries were the mainstay of the Lane County economy for decades, and remain an important part of the economy today. The location quotient for wood products in Lane County compared to the U.S. is 8.4 the second highest location quotient of all industry subsectors in Lane County. The highest location quotient (9.27) belongs to the related subsector, forestry and logging. The next highest location quotient in Lane County after these two subsectors is This would seem to point to wood products (and forestry and logging) as the industry cluster with the highest comparative advantage in Lane County. Despite being hit by recessions, timber supply reductions, foreign competition, and most recently, a slumping housing market, wood product manufacturing endures. In response to these events, the industry has become more efficient through larger mills that can process a wider range of raw material, and more diverse with a shift toward secondary wood products. Today s lumber mills are lean and high-tech. Nonetheless, the long-term employment trend for this industry is still negative. Wages in wood product are high - $42,459 average annual wage in Food Food manufacturing has emerged as the second largest manufacturing subsector coming out of the recession. Food manufacturing in Lane County does not have an above average location quotient compared to the U.S. (0.92), but Oregon as a state does (1.25), with much of that industry concentration located just up I-5 between Salem and Portland. As a nondurable goods subsector of manufacturing, food is typically less susceptible to the cyclicality that comes with recessions, and that seemed to be the case in this past recession as well. Some local leaders in business and public policy see food manufacturing as uniquely positioned in Lane County, with a niche in natural and organic food. From Golden Temple and Grain Millers, to Springfield Creamery and Toby s Family Foods, Lane County has a variety of food manufacturers producing natural and organic food products. A local culture that supports natural and organic foods helps build comparative advantage for this subsector. Food manufacturing pays less than average for a manufacturing subsector at $37,729, but that s still higher than the all-industry average of $35,465 for 2009 in Lane County. Machinery Machinery is probably the least well-known of Lane County s largest manufacturing subsectors. While many Lane County residents could name a few wood products or food manufacturers, how many could name more than one or two machinery manufacturers? It probably has as much to do with the industry subsector title as anything because some well known LANE WORKFORCE PARTNERSHIP 26

29 companies are included in this subsector like Peterson Pacific, Bulk Handling Systems, and Johnson Crushers. Machinery manufacturing is similar to fabricated metal product manufacturing where metal is forged, stamped, bent, formed, machined, welded, or fabricated to create parts or final products, but machinery typically involves several of these processes to create a complex machine that applies mechanical force for a particular application. Design is an important component of machinery production. Lane County machinery manufacturers are diverse, with the strongest concentration of employers in agriculture, construction, and mining machinery, industrial machinery for sawmills and woodworking, and material handling equipment. There is a connection with the wood cluster in those companies that make industrial equipment for sawmills and woodworking. The location quotient for machinery is strong at 1.41 compared to the U.S., which places it in a tie for the eleventh highest location quotient in the county among all industry subsectors. The average annual wage in machinery was $47,414 in 2009, higher than both wood products and food. Health Care Health care is the largest and fastest growing targeted industry cluster. Health care is comprised of ambulatory health care facilities, hospitals, and nursing and residential care facilities. Health care is the only cluster profiled in this report that is not a traded sector. Lane County is a regional center for health care in Oregon and, as a result, some services are consumed by patients outside the county. This brings money into the community like a traded sector, but most health care services are consumed locally. Despite not being a traded sector, health care is of regional importance because it is forecast to have the most employment growth of all industry sectors, and it pays higher than average wages. (see Figure 17) In 2009, 17,300 people were employed in private sector health care. Health care employment is projected to grow 23 percent between 2008 and 2018 in Lane County and add 3,900 jobs, more than any other industry. About 50 percent of workers in health care are 45 years of age and older, which will also create many replacement openings as workers retire. The average age of nurses nationwide is estimated to be over 50. Health care accounted for 12 percent of nonfarm employment in Lane County in 2009, a little more than usual due to employment losses in other sectors like manufacturing and construction. The 2009 average annual wage in health care and social assistance (wage for health care alone not available) was $42,207, compared to the county average of $35,465. Higher than average wages, in addition to high employment growth and overall job openings, make the health care cluster particularly attractive to workers who are looking for ample job opportunities and the ability to earn a family wage. (see Table 6, Appendix B) Lane County s growing and aging population is driving the growth in health care. As the baby boomer generation gets older, the demand for health care will increase. In response, PeaceHealth built and opened a LANE WORKFORCE PARTNERSHIP 27

30 Health Care Forecast to Add Most Jobs in Lane County between 2008 and Lane County Employment Projections by Industry Educational and Health Services Government Professional and Business Services Leisure and Hospitality Retail Trade Wholesale Trade Other Services Financial Activities Transportation and Utilities Information Natural Resources and Mining Construction Manufacturing Source: Oregon Employment Department Figure 17: Health Care Forecast to Add Most Jobs in Lane County new hospital, RiverBend, in the Gateway area of Springfield in The U.S. Department of Veteran Affairs is also planning on building a new 100,000 square foot clinic in Eugene-Springfield that could open as soon as Other health care providers, including Oregon Medical Group and Slocum Orthopedics, for example, have also been busy expanding services throughout the county. Government is also expected to grow health care services locally as the State of Oregon begins breaking ground on a new psychiatric hospital in Junction City that is scheduled to open in Shortages in nursing and other high demand occupations in health care have been a concern for years. The recession has temporarily alleviated some shortages, but area health care providers are still worried. A survey of area health care providers administered recently by Lane Workforce Partnership found recruitment for specialty Employment Change and hard to find positions the highest concern for area hospitals, clinics and laboratories. The survey asked respondents to rank occupations by difficulty in recruitment. The top ranked occupations starting with most difficult included: rehabilitation counselors; occupational therapists, physical therapists, and managers. An estimated sixty percent of Lane County workers who have been dislocated from their primary industries during the recession are retraining in health care occupations. This will meet some of the demand; however, much of the looming shortage in health care workers is not due to lack of interest, but to lack of space in training programs. Last year, Lane Community College was able to accept about one out of four qualified candidates that applied for eighty nursing program slots. Pioneer Pacific College in Springfield had 200 applicants for 48 slots in their Licensed Practical Nurse training program. Several factors contribute to capacity constraints, including the high relative costs LANE WORKFORCE PARTNERSHIP 28

31 of health education programs, a lack of clinical placements, and faculty shortages. Health care professionals with advanced degrees can garner a much higher income in the private sector than in education, so are less likely to become instructors. Adding to the difficulties, the Oregon community college system is struggling to provide services across all programs in the face of limited funding, rapid student growth and increasing student needs. The constraints are not limited to the allied health programs themselves, but also to math, science, and English classes, including basic skills education, necessary for entry into and success in health care programs. Many health care occupations require specific training or postsecondary degrees. Locally, health care employers have been working together with educators and workforce development strategists to alleviate potential workforce shortages since The Community Healthcare Education Network, convened and facilitated by Lane Workforce Partnership, has helped to increase training capacity and to shape area health care education programs to better fit employers needs. A similar team is meeting to prepare Junction City residents for jobs in the future psychiatric hospital. Software and Computer Systems Design Software and computer systems design has become a strong industry cluster in Lane County over the past decade. This cluster includes software publishers and computer systems design and related services. Software publishers are businesses engaged in computer software publishing and/or reproduction. Computer systems design and related services are businesses engaged in providing expertise in the field of information technologies through one or more of the following activities: (1) writing, modifying, testing, and supporting software to meet the needs of a particular customer; (2) planning and designing computer systems that integrate computer hardware, software, and communication technologies; (3) on-site management and operation of clients' computer systems and/or data processing facilities; and (4) other professional and technical computer-related advice and services. Software and computer systems design is a small cluster in comparison to health care and manufacturing. In 2009, covered employment (all employees covered under Oregon unemployment insurance) for this cluster was 2,015 with 162 businesses. This is about the same employment as 2007, but with a few more businesses. Software Lane Community College (LCC), which already graduates more students with twoyear degrees in nursing than any other school in Oregon outside the Portland metro area, is currently completing construction of its new Health and Wellness Center. The Center is expected to open in Fall Term, 2010 and will allow LCC to double the number of nursing graduates, providing even more opportunities for students looking to start a career in this high demand, high wage occupation. LANE WORKFORCE PARTNERSHIP 29

32 Software and Computer Systems Design Employment Growing Faster in Lane County than Oregon and U.S. (Indexed to 2001 Software and Computer Systems Design Covered Employment in Lane County) 2,200 Lane County Oregon U.S. 2,000 1,800 1,600 1,400 1,200 1, Source: Oregon Employment Department Figure 18: Software and Computer Systems Design Employment publishing employment was five times larger than computer systems design employment, at 1,678, while computer systems design accounted for twice as many businesses as software publishing with 112. Employment in this cluster grew 22 percent between 2001 and 2009 in Lane County. In contrast, software and computer systems design employment in the U.S. grew 7 percent over that time, while employment declined by 11 percent in Oregon (Figure 18). Employment in this cluster is projected to grow 11 percent between 2008 and 2018 in Lane County. The 2009 average annual wage was $64, percent higher than the county average. In addition to the covered employment in this cluster, it is assumed that there are quite a few individuals working in software and computer systems design who are not covered under unemployment insurance, including the self-employed. It is difficult to quantify how many of these individuals there are, especially because many of them may be working from home or in a virtual office. For example, nationwide, the Bureau of Labor Statistics estimated that 3.7 percent of computer software engineers and computer programmers were self-employed in Software and computer systems design has location quotients of 1.17 and 1.31 compared to the U.S. and Oregon, indicating a fair concentration of employment in Lane County. Software alone, though, has a very high location quotient of 6.27 compared to the U.S. Growth in this cluster should remain strong nationally and internationally as the use of computers continues to increase around the world. This cluster is very mobile, competitive, and susceptible to changes in the business cycle. Despite these fluctuations, high wages and opportunity for growth make this cluster increasingly important to the economy of Lane County. In many cases, software publishing and LANE WORKFORCE PARTNERSHIP 30

33 computer systems design can be done from almost anywhere, which makes it difficult to determine just how large and sustainable this cluster will be in Lane County. Lane County could have a comparative advantage over other locations by being an attractive place to live for businesses and workers in this cluster. (see Table 7, Appendix B) In general, a bachelor s degree is required to be competitive for many jobs in software and computer systems design, such as computer software engineers. Computer software engineers are among the occupations projected to grow the fastest and add the most new jobs in the U.S. between 2008 and The majority of computer software engineers and computer programmers in Lane County are employed in this cluster. Excellent job opportunities exist for those without bachelor s degrees in the form of computer support specialists and customer service representatives, but these jobs typically pay half of what software engineers earn. Scientific Research and Development The Eugene-Springfield metro area is a hub for scientific research and development in the social sciences. This cluster owes much of its growth to connections with the University of Oregon. Many owners, employees, and researchers of these businesses have ties with the University. Some have worked there; others have attended. The symbiotic relationship between the University and the research industry has helped this cluster grow and produce or contribute to the success of many new and innovative businesses. This cluster is comprised of businesses in scientific research and development services. This industry group is further divided into two main areas: research and development in the physical, engineering, and life sciences, and research and development in the social sciences and humanities. Lane County s research employment is concentrated in the social sciences and humanities. Scientific research and development in Lane County had 45 businesses with 651 employees in Seventy-nine percent of employment was in the social sciences and humanities. Average annual covered wage was $40,958. The University of Oregon is not included in this employment and wage data because it is a government entity and not all of its employment and wages go towards scientific research and development, but the University is central to this cluster s existence and viability in Lane County. (see Figure 19) The National Institutes of Health (NIH), the largest grantor for medical research in the world, awarded a remarkable $62.3 million to 12 organizations in Lane County in This was an increase of 15 percent over The $62.3 million represented 22 percent of the $280.6 million in NIH funding awarded statewide, with most of that money funding research activities. The University of Oregon received more than one-third of the $62.3 million. The largest private sector recipients were Oregon Research Institute ($13.6 million), Oregon Social Learning LANE WORKFORCE PARTNERSHIP 31

34 Social Science and Humanities Research has Highest Location Quotient of Traded Sector Industries in Lane County after Wood Products, Logging, and Forestry Industries 2009 Lane County Location Quotients, U.S. Base Area, by 5 Digit NAICS Plywood and engineered wood product mfg. Support activities for forestry Sawmills and wood preservation Timber tract operations Recreational vehicle dealers Logging Social science and humanities research Rooming and boarding houses Religious organizations Software publishers Source: Oregon Employment Department Location Quotient Figure 19: Social Science and Humanities Research has Highest Location Quotient Center ($11.2 million), and Oregon Center for Applied Science ($6.0 million). These four organizations received 89 percent of NIH funding in Lane County. Between 1998 and 2007, total research and development expenditures in Oregon increased 127 percent, which ranked 11th in the U.S. in Research and Development (R&D) growth. Between 2003 and 2008, R&D expenditures at Oregon colleges and universities increased 36 percent, which ranked 7th in the U.S. Overall, Oregon is ranked in the middle of states in total R&D expenditures and R&D expenditures at colleges and universities, but R&D is growing much quicker in Oregon than it is in most other states. This increase in research funding at Oregon schools, of which the University of Oregon is the main recipient in Lane County, fosters growth and development of private-sector businesses related to and created from university research. Despite gains in funding, one of the threats to the growth and development of scientific research and development in Lane County is, in fact, grant funding. Some of these businesses rely on grants. By their very nature, grants are unpredictable and susceptible to changes in the business cycle and public policy. Foundations and industry organizations can also rapidly change the focus of funding, which can leave some research businesses without grants if they cannot adapt. While grants are vital to the sustainability of some of these businesses, many sell their products and services on the open market. This not only provides an element of sustainability to this cluster, it also provides more opportunities for economic and employment growth. This cluster s stable employment and increased funding in recent years points to a sustainable, growing industry. Scientific research and development employment in Lane County is forecast to LANE WORKFORCE PARTNERSHIP 32

35 grow 20 percent between 2008 and This is well above the all-industry average of 10 percent in Lane County. Educational requirements for jobs in research range from short-term, on-the-job training to advanced postsecondary degrees. Average annual wages vary from around $30,000 for interviewers to nearly $90,000 for psychologists. Social science research assistants and psychologists are projected to account for nearly one-third of all new jobs in research. These occupations require bachelor s and master s degrees. (see Table 8, Appendix B) Green Jobs Green jobs are not a cluster of industries or occupations based on the production of a common good or service, but rather jobs that are connected based on the principles of green development. In the Oregon Employment Department s 2009 report, The Greening of Oregon s Workforce, a green job was defined as providing a service or making a product that: (1) increases energy efficiency, (2) produced renewable energy, (3) prevents, reduces, or mitigates environmental degradation, (4) cleans up and restores the natural environment, or (5) provides education, consulting, policy promotion, accreditation, trading and offsets, or similar services supporting categories 1-4. Oregon employers were surveyed in 2008 to provide information on the number of green jobs they employ. Oregon had an estimated 51,402 green jobs in 2008, which accounted for 3 percent of Oregon s private and government employment. More than 5,000 employers reported employment of green jobs. Green jobs were reported in all broad industry groups in Oregon. The three industries with the most green jobs were construction, wholesale and retail trade, and administrative and waste services. Combined, these industries accounted for 47 percent of Oregon s green jobs. Oregon s green jobs were also spread across many different occupations. The five occupations with the most green jobs were carpenters, farm workers, truck drivers, hazardous materials removal workers, and landscaping and groundskeeping workers. All together, these occupations captured 27 percent of Oregon s green jobs. The 2008 average hourly wage statewide for green jobs was $ Two-thirds paid $15.00 per hour or more. On average, green jobs paid slightly higher wages than jobs across the entire economy, but wages varied significantly depending on occupation and education requirements. Education requirements for green jobs looked very similar to requirements for all jobs statewide. Thirty-two percent of green jobs did not have a minimum education requirement, 33 percent required a high school diploma, 7 percent required some college, 7 percent required an associate or vocational degree, 18 percent required a bachelor s degree, and 4 percent required other education. In all, LANE WORKFORCE PARTNERSHIP 33

36 two-thirds of green jobs required no more than a high school education. Almost one-third of green jobs required a special license or certificate, but most of these were not green specific, but rather specific to certain occupations like electricians or truck drivers who need to have certain licenses to operate, regardless of whether or not they are green. Employers projected the number of green jobs would grow 14 percent between 2008 and 2018, above the statewide average of 9 percent. The most growth was projected in the farming, fishing, and forestry occupations, transportation and material moving occupations, and production occupations. Lane Workforce Partnership has convened a Green Jobs Task Force to learn more about the local green sector and to identify relevant training and workforce needs. More information about this task force can be found on page 41. The most growth [in green jobs] was projected in the farming, fishing, and forestry occupations, transportation and material moving occupations, and production occupations. LANE WORKFORCE PARTNERSHIP 34

37 Skills for the Future Making strategic decisions about investments in education or retraining is daunting at any time, but it is especially so in today s uncertain and rapidly changing economy. Lane Workforce Partnership continually scans the horizon, monitoring workforce and industry trends and projections in order to bring the best available intelligence on this topic to this region s youth, job seekers and educators. Of particular interest are industries, occupations and skills that are projected to be in demand in the Lane County area. Demand can be generated in several ways: Growth in an industry due to an increase in consumer need, such as an aging population leading to more health care jobs A high number of anticipated retirements in an industry or occupation as is occurring in the manufacturing and utilities sectors Changes in technology such as robotics and nanotechnology Changes in the environment and natural resources that may drive growth in green and sustainability sectors A demand-driven approach to workforce development ensures that a ready pipeline of trained workers is available to meet this region s industry needs. Lane Workforce Partnership has historically identified specific industries and occupations that are in demand in the Lane County area and this year added an analysis of skills in demand. The future of American competitiveness is more about skill enhancement than it is degree acquisition Ed Barlow, Futurist Lane County Skills in Demand Some basic skills, such as communication skills, will always be valuable to employers. However, changes in the economy will continue to create demand for new and different skills. While degrees and certificates are still necessary for many occupations, more attention is being paid to transferable skills. Transferable skills are those that can be used in a variety of occupations and industries. Examples range from computer skills to being bilingual to welding. A lifelong learning strategy of continually building and refining an in-demand, transferable set of skills can be a way for workers to remain nimble in an ever-changing labor market. Data on occupations and industries in demand in Lane County have been readily available, but until recently information about specific skills in demand has not. Lane Workforce Partnership requested a customized report from the Oregon Employment Department that ranks the top skills in demand in Lane County. The list is based on the Projections by Industry and Occupation analysis that is released every two years. The projected occupations most in demand were broken down into skill sets and those skill sets were sorted and prioritized. The skills list is further broken down by skills in demand in low, medium and high wage Jobs. Low wage jobs are defined as those that pay under $30,000 annually, medium wage jobs as $30,000 to $50,000 and high wage jobs as those that pay over $50,000 per year. (see Figures 21-23) LANE WORKFORCE PARTNERSHIP 35

38 Top 20 Skills in Demand in Lane County for Low Wage Occupations use basic mathematics provide customer service work as a team member process records and maintain forms and files apply health and sanitation standards receive payments and make change use cash registers follow safety procedures apply food handling rules interpret and apply health regulations in lodging and maneuver heavy objects weigh and package products locate and retrieve merchandise from storage stock, organize and clean shelves provide customer service using telephone balance cash and receipts replenish supplies on tables, counters, or buffet tables measure or weigh ingredients sell products use computers to enter, access and retrieve data Projected Total Job Openings Figure 21: (Above) Top 20 Skills In Demand, Low Wage Occupations Figure 22: (Below) Top 20 Skills In Demand, Medium Wage Occupations Top 20 Skills in Demand in Lane County for Medium Wage Occupations process records and maintain forms and files use basic mathematics obtain information from clients, customers, patients or use computers to enter, access and retrieve data work as a team member provide customer service prepare reports in timely manner use correct grammar, punctuation and spelling follow safety procedures process and prepare business forms apply mathematical principles to accounting, operate fax machines, copiers, printers, and other maneuver heavy objects organize and work with detailed records schedule appointments use algebra use computer understand, use, and communicate technical information provide customer service using telephone compose business correspondence Projected Total Job Openings LANE WORKFORCE PARTNERSHIP 36

39 Top 20 Skills in Demand in Lane County for High Wage Occupations process records and maintain forms and files obtain information from clients, customers, patients or use algebra prepare reports in timely manner understand, use, and communicate technical information work as a team member use computers to enter, access and retrieve data make presentations apply active listening techniques apply mathematical principles to accounting, research work related topics using library resources use correct grammar, punctuation and spelling use interviewing techniques provide customer service conduct employment interviews apply statistical methods develop budgets hire and dismiss employees use medical terminology respond to personnel problems and grievances Projected Total Job Openings Figure 23: Top 20 Skills In Demand, High Wage Occupations Some skills are unique in each wage category, and some skills show up across all the wage categories. The skills that cross all wage categories are highly transferable and can be thought of as a foundational skill set for many in-demand occupations. (see Figure 24) worker to concentrate on developing these skills on the job in order to be competitive for promotional opportunities. (see Figures 25-26) Low and medium wage occupations share some top skills, as do medium and high wage occupations. These common skills could help lower wage workers bridge to higher wage occupations. Many individuals move along career ladders by a gradual improvement and acquisition of skills rather than acquiring a credential or degree. An increased awareness of skills in common with higher wage occupations could allow a LANE WORKFORCE PARTNERSHIP 37

40 Skills in Demand that Bridge Low to Medium Wage Jobs use basic mathematics follow safety procedures maneuver heavy objects operate fax machines, copiers, printers, and other office provide customer service using telephone organize and work with detailed records resolve conflicts # of Jobs Requiring Figure 24: Skills in Demand that Cross Low and Medium Wage Jobs Skills in Demand that Cross Low, Medium and High Wage Jobs process records and maintain forms and files work as a team member provide customer service obtain information from clients, customers, patients or apply health and sanitation standards use computers to enter, access and retrieve data use correct grammar, punctuation and spelling # of Jobs Requiring Figure 25: Skills in Demand that Cross Medium and High Wage Jobs LANE WORKFORCE PARTNERSHIP 38

41 Skills in Demand that Bridge Medium to High Wage Jobs prepare reports in timely manner use algebra understand, use, and communicate technical information apply mathematical principles to accounting, bookkeeping apply active listening techniques use interviewing techniques make presentations # of Jobs Requiring Figure 26: Skills in Demand that Cross Medium and High Wage Jobs The Next Economy: A Regional Approach Lane Workforce Partnership has had a long standing interest in working toward a shared regional identity and approach to economic and workforce development. Alignment of area resources and services has been a priority for the Lane Workforce Partnership Board of Directors for over a decade. To that end, the Lane Workforce Partnership board past President Rosie Pryor and Executive Director Chuck Forster held a number of meetings with local elected officials and community leaders in early A Technical Advisory Group comprised of local business leaders, economists, city officials and workforce development representatives met for six months to discuss common concerns and to formulate the building blocks of a regional strategic plan. A Regional Prosperity Summit was held in November 2009 to gather further input from the community. Over 250 people attended the summit and feedback was gathered in ten breakout discussion sections. A series of regional strategies and tactics are currently being developed and refined. More information can be found at A talented workforce is the key to our region s economic success. Building programs, partnerships and a regional culture that values learning and entrepreneurial spirit and creativity will help us grow, and attract innovative talent to our region. Richard Lariviere, University of Oregon President, from his keynote address at the Regional Prosperity Summit. Lane Workforce Partnership s Role in Creating the Next Economy It is especially evident during recessionary times that workforce development is economic development. Local economic developers have repeatedly stated that a skilled workforce is the number one priority of companies that choose to locate in Lane County. Regions that can work collaboratively to attract, develop and retain LANE WORKFORCE PARTNERSHIP 39

42 a high quality workforce will have a significant competitive advantage, both in attracting business to this area and in producing high quality products. A successful workforce development system has alignment between the supply side (workers skill sets) and the demand side (skills employers require). If Lane County industries cannot find skilled workers, productivity and growth will decrease. Surveys of local employers in the health care, manufacturing and utilities industries have all indicated skills shortages in key occupations even in the midst of the current recession. Lane Workforce Partnership plays a key role as intermediary in monitoring business and industry s ever-evolving skill needs and local training and education s capacity to train residents to meet those needs. Much of this work is done through industry consortia networks. These consortia networks support the area economy by promoting: Realignment of education and training programs to be more flexible and responsive to the needs of the workers and industry An increased regional focus on the need for skilled workers and identification of skill gaps Increased regional communication of the workforce development situation and challenges Consortia and industry networks Since 2008, the Lane Workforce Partnership has engaged over 100 different employers in industry consortia groups supported by almost half a million dollars in state and federal grants. Convened by Workforce Partnership staff and led by industry, these groups have evolved from focusing on individual company training needs to playing a broader stewardship role, encouraging collaboration among member firms, education and workforce development. It s great to work on a problem with people from other types of companies and backgrounds. They can see things with fresh eyes and bring ideas we never would have thought of. -- EVHPEC member. The groups provide structure and a safe environment for businesses to meet and discuss common interests and concerns. Rich, peer networks and innovative privatepublic partnerships have formed. These alliances also generate business-led workforce development strategies that more closely meet market demands. Local consortia groups have reported the following business benefits from participation in consortia: A unified voice of industry in advocating for workforce and training needs A forum to develop relationships with education and economic development Customized, affordable training programs for current workers Lower training costs due to bulk buying power, resource sharing, and the sharing of collaborative information Increased public awareness and visibility of industry in Lane County and Oregon Internship programs Creative industry outreach activities Since 2001, Lane Workforce Partnership has helped launch several business consortia. These groups all continue today and build on each other s best practices. Community Healthcare Education Network The Community Healthcare Education Network (CHEN) is a health care workforce consortium that has been convened by Lane Workforce Partnership since This diverse consortium is made up of the six major healthcare employers in the area, longterm-care representatives, four local LANE WORKFORCE PARTNERSHIP 40

43 colleges, 6th 12th grade health occupations education providers, and Lane County Public Health. The goal of CHEN has been to address the critical shortages in health care workers. Grant funders support a business-led consortia approach because of its widespread systemic impact and innovative models and practices. CHEN has leveraged over $500,000 in grant funds to expand local training opportunities, provide training scholarships and promote healthcare career opportunities in Lane County. Projects developed by CHEN, such as industry career pathway maps and a grow your own career progression model, have gotten national attention and have been widely used in subsequent consortia groups. Lane Manufacturing Skills Alliance The Lane Manufacturing Skills Alliance was formed in Its main focus is to oversee and coordinate manufacturing workforce pipeline development activities. Regular Manufacturing-Education Forums bring area manufacturers together with high school and community college professional technical instructors to discuss strengthening area manufacturing training and manufacturing support of education programs. A manufacturing career outreach campaign was developed by the Alliance that included a Made in Lane County presentation, flyers promoting demand occupations in manufacturing, a booth at local career fairs, and presentations on manufacturing career pathways at all twenty high school career centers. The group arranged quarterly manufacturing plant tours for students and professional/technical instructors in consortium with the local chapter of the Society of Manufacturing Engineers. In support of the Alliance, Lane Workforce Partnership developed a website providing information to students and jobseekers on local high wage, high demand manufacturing occupations and a training calendar and training resource repository for manufacturers. Emerald Valley High Performance Enterprise Consortium The Emerald Valley High Performance Enterprise Consortium (EVHPEC) was established by Lane Workforce Partnership in 2007 to support businesses in implementing Lean and High Performance practices. Lean is a systemic approach to identifying and eliminating waste through continuous improvement of production and operations. A major focus of the approach is to empower workers to make production decisions at the lowest level possible. Lean encompasses many manufacturing concepts such as Just in Time and Total Quality Management, but is much more comprehensive, impacting all levels of a company from production to accounting to human resources to the company s entire supply chain. EVHPEC is a peer-driven learning network where companies and individuals share best practices in Lean/High Performance practices, benchmark successes and network with one another. Learning activities include structured learning tours, training classes, guest speakers, executive forums and special interest groups. This group is largely supported by membership dues, but has also acquired over $150,000 in grant funding for administrative support and training. Last year, EVHPEC officially incorporated as a 501(c)6, a non-profit business association. More information about EVHPEC can be found at Green Jobs Task Force The Lane Workforce Partnership Green Jobs Task Force was formed in 2010 and is composed of local workforce and economic development, business and education representatives. It s goal is to identify training and workforce needs specific to Lane County s green industries in order to assure that Lane County workers are prepared for high demand, high wage jobs in this area. The Task Force expects to complete its work by June of Findings of the group will be published on LANE WORKFORCE PARTNERSHIP 41

44 Preparing Youth for the Next Economy Lane Workforce Partnership has been particularly concerned about high levels of youth unemployment. This is a local as well as a national issue. Young people leaving school today are facing an uncertain future. Data from the federal Bureau of Statistics first sounded the alarm in 2008 when it reported that young adults had the highest unemployment rate since records were first kept in It found that approximately one in four unemployed persons in America is under age 25. Further research in 2009 found that workers under age 30 account for 70 percent of the layoffs that have occurred during this recession. Young African- Americans and Hispanics have a disproportionately higher rate of unemployment, approaching 35 percent. Unemployment data by age is available for the state of Oregon, but not at the county level. The most recent data available is for The unemployment rate in 2009 for year olds actively seeking work was 31 percent. For year olds in Oregon, it was 17 percent. Why are young people so disproportionately affected by this recession? First, the majority of layoffs are conducted on a last hired, first fired basis. This means that older and more experienced workers tend to be retained while younger workers are let go. Second, older more experienced workers that have been laid off are competing for and getting many entry level jobs, edging out younger candidates. Last, both employers and older workers are sitting tight, taking as few risks as possible in an uncertain environment. Many young people have taken refuge in continued education or in subsidized employment programs such as AmeriCorps and Teach for America. Some analysts fear that the U.S. will be facing a so-called lost generation of young people patching together part-time and temporary jobs during the critical career development period of young adulthood. Research indicates that young workers in this situation will face a LANE WORKFORCE PARTNERSHIP 42

45 lifetime of lower earnings and reduced labor market participation. Internships and summer employment opportunities can help create a potential source of future permanent workers for business while helping these young workers build their resumes and develop work readiness skills. Even shorter-term connections like job shadow opportunities and outreach at events such as school career fairs can make a difference by helping young people to plot out their career paths. During summer 2009, with support from the American Recovery and Reinvestment Act, the Lane Workforce Partnership operated a Youth Summer Jobs and Careers Program. Through a network of youth providers, 320 young people were placed in work experiences and internships. They worked more than 45,800 hours for communitybased organizations, government offices and local businesses. They worked as office assistants, landscapers and maintenance workers, research assistants, organic gardener, member of trail crews, weatherization installers and more. Some worked in service crews that completed projects benefiting local communities. Examples of these projects include a public walkway alongside the McKenzie River, landscape improvements at Pleasant Hill and McKenzie high schools, and preparation and implementation of a free lunch program for Oakridge families. Additionally, many took part in career academies at Lane Community College in health occupations, green jobs and construction and manufacturing. These youth experienced the value of work, developed work readiness skills, improved their financial literacy skills and learned about career opportunities. Many received their first paycheck. More than $385,000 went directly into the hands of young people. That money was spent locally to support their families, to pay for clothing for school and, of course, for fun. A study funded by the Oregon Workforce Alliance and conducted by Oregon State University tracked the spending of 1,200 young people participating in rural Oregon Summer Youth Employment Programs. It found a return of $1.46 for every dollar earned by youth. Assuming the same return in Lane County, the wages paid to young people yielded an investment of more than $562,000 in the local community. Summer jobs benefit everyone: young people, families, the community and local businesses. Policy and Planning Recommendations Lane Workforce Partnership s vision for the next economy includes a balanced mix of lower, middle and higher skilled jobs and a workforce training system that aligns well with industry needs. To shape this vision for Lane County, strategic planning and close collaboration are needed. The following are specific policy recommendations to move toward a more stable and prosperous economy: More Summer Jobs and Career- Related Opportunities for Youth Young people need more opportunities to explore careers and to develop work readiness skills. Employment in teen years is one of the best predictors of work readiness, future earnings and lifelong economic selfsufficiency. State and Federal funding for summer jobs programs for youth is critical. In addition to public sector support, local employers can help by championing the establishment of a summer jobs campaign for all Lane County youth. Area businesses also play a crucial role in preparing the future workforce by offering job shadowing, internships, apprenticeships and community service opportunities. The Lane Workforce Partnership can help make these connections. National Career Readiness Certificates Lane Workforce Partnership supports National Career Readiness Certificates (NCRC). This is a nationwide system for certifying the essential skills necessary for success in over 16,000 jobs. A Certificate LANE WORKFORCE PARTNERSHIP 43

46 vision of economic recovery and future prosperity. Alignment of policies and resources is essential. Lane Workforce Partnership is an active participant in ongoing discussions and development of a regional plan and is well positioned to serve as an intermediary to this end. Support Middle Skill Jobs Middle skill jobs are those that require more than a high school diploma, but less than a four year degree. These jobs are critical to the economy as they contribute to the strength of the middle class and provide career mobility for workers. There must be a concerted effort to educate the community about these job opportunities and encourage business development that supports middle skills job creation. provides specific information about a person's skills in three areas critical in virtually every job: Applied Mathematics Reading for Information Locating Information Over 35 states have or are in the process of implementing these programs. NCRC testing is available at both WorkSource Lane Centers in Eugene and other WorkSource Oregon Centers throughout the state. WorkSource Centers provide businesses and job seekers with one-stop access to employment and training services. Regional Collaboration In order to recover from the recent recession, a regional approach is needed. Workforce development, education, business, economic development and community leaders must work together toward a shared On-the-Job-Training, A Job Creation Strategy The U.S. Department of Labor has recently emphasized On-The-Job (OJT) training as an important strategy in the skilling up of America s workforce. Financial reimbursement to participating employers is likely to lead to job creation, especially when coupled with initiatives such as BOOST Oregon. The strategy is an earn and learn training option and makes training available to those who have neither the time nor the resources to spend extended time in traditional classroom training. The Lane Workforce Partnership began offering OJT July 1, Skilling Up Even More Important in a Down Economy Youth, the unemployed and current workers must continue to upgrade their skills in order to maintain viability in the labor market. Last year Lane Workforce Partnership awarded 454 training scholarships to low income and unemployed adults and 200 current workers received training through the Employer Workforce Training Fund. Courses to upgrade basic skills are available at no cost at both WorkSource Lane Centers in Eugene at no cost to the individual. Oregon is one of a few states that does not invest in skilling up its current workforce. LANE WORKFORCE PARTNERSHIP 44

47 Oregon relies almost solely on funds through the Workforce Investment Act. These funds are limited in flexibility and amount. Recognizing that almost two-thirds of the workforce of 2020 is currently employed, Oregon will not transition to a greener more prosperous economy without an investment in the training of today s workforce. A State investment is a essential. Grow Wages and Income Sixty-one percent of Lane County residents earn less than the county s average wage of $35,465. The wage gap between Lane County and the rest of the state was sixteen percent in Twenty one percent of Lane County jobs pay less than $25,000 per year. Government and business must work together to grow local wages and income. In July 2010, the Oregon Business Council proposed a three step plan to get Oregon back on track: 1. Grow jobs and incomes: raising per capita income is the best way to improve the situation of Oregon families and the state budget. 2. Restructure the state budget and the way state services are delivered: Economic growth alone will not solve the problems. As the Governor s reset report shows, Oregon is facing structural problems that require a new approach to state budgeting and the delivery of state services. 3. Adjust the tax system: Oregon s lack of reserves and over-reliance on the income tax are creating a drag on the state economy. Adjustments need to be made in the near term and everyone must get serious about reform for the long-term. The full report Oregon's Challenge: Breaking Out of a Circle of Scarcity can be found on their website: Contributors to the State of the Workforce Report Chuck Forster Lane Workforce Partnership Robin Scott Lane Workforce Partnership Lonnie Bivins Lane Workforce Partnership Brian Rooney Oregon Employment Department Mike Meyers Oregon Employment Department For an electronic version of this document, please go to: If you have any questions, please contact Robin Scott at (541) or robins@laneworkforce.org. LANE WORKFORCE PARTNERSHIP 45

48 APPENDIX A 2009 Manufacturing Survey Results BACKGROUND In 2007, Lane Workforce Partnership developed and administered a manufacturing survey in order to learn more about how local manufacturers view and are responding to workforce issues. The survey was modeled on a National Association of Manufacturers survey and was conducted on Survey Monkey, an online survey service. This survey was successful in terms of the response rate and the information gathered, so the decision was made to repeat the survey on an annual basis. The 2008 survey was given last year and now the 2009 survey has just been completed. The same questions have been asked year after year in order to be able to track trends over time. One new question was added this time regarding the recent economic downturn. The results from all three years are compared in this report. Thirty-five Lane County manufacturers responded to the 2009 survey, representing all significant manufacturing sub-sectors in Lane County, including wood products, transportation, metals, computer/electronics, machinery, food processing, chemicals, and plastics. Respondents also represented a balance of small and larger business sizes. The number of responses in the past three years has ranged from 31 to 35 out of roughly 100 polled. SURVEY RESULTS Most evident in this year s manufacturing survey results is the impact of the economic downturn on this sector. Manufacturing as a whole has lost approximately 6,000 jobs in Lane County since The most recent numbers from the Oregon Employment Department indicate that there are currently about 14,000 manufacturing jobs remaining in Lane County (from a high of 20,000 in 2006), and represents approximately 12% of local employment. A question was added this year asking manufacturers to report on the specific impacts of the recession on their business decisions related to their workforce. Over 70% percent reported that they had reduced personnel and almost half reduced wages. Thirty-eight percent reduced benefits. Not surprisingly, the severe recession has reduced concerns about worker shortages in the survey. Those citing difficulty in finding skilled applicants for open positions dropped from a high of 65% in 2007 to 46% in However, a remarkably high number of respondents (68%) still remain concerned about future shortages of skilled, technician-level workers. The top two skills manufacturers chose as being those that their employees would need more of in the coming years included Computer Skills, which leapt from 41% in 2008 to 65% this year and Lean Manufacturing/High Performance Skills (59%). LANE WORKFORCE PARTNERSHIP 46

49 Healthcare benefits (62%) and in-house training programs (59%) still ranked highest as especially helpful in recruiting and retaining a qualified workforce. Improving Organizational Culture jumped up to third place from fifth place last year, while strategies such as Increased Wages and Career Ladder/Promotional Opportunities dropped significantly. Efforts to reduce turnover among current employees (52%) and Efforts to change attitudes about manufacturing jobs (49%) ranked highest among recruitment and retention strategies companies would like to utilize in the future. A lean/high performance workforce (77%) and new product innovation (56%) were cited as the most important to their company s success over the next three years. High Tax Burden was ranked as the most significant barrier to business expansion by 40% of respondents, up from a low of 10% in This is perhaps due to current tax measures on the ballot. from 58% in This was followed by High Cost of Labor, cited by 37%, up from 19% in Several cited lack of access to capital and the economy in the comments section. Sixty-one percent of respondents who are facing current skills shortages in their workforce cited that these shortages have resulted in Reduced Production Output/Sales and Reduced Overall Productivity. On the bright side, Reduced Product or Service Quality fell to 17% from a high of 40% in Fourteen respondents indicated an interest in joining with other area manufacturers to discuss issues raised in the survey. A roundtable discussion will be held in March to discuss the survey results. LANE WORKFORCE PARTNERSHIP 47

50 Manufacturing Survey Results Comparison 2009, 2008 and 2007 SURVEY RESULTS 1. What workforce issues are of most concern to you as you look toward the future? 2009 Other responses: 1. Economy 2. Economy 3. Not concerned 4. Being able to pay family wages. Finding people with clean driving records! 5. Loss of Manufacturing jobs in the local area. Since manufacturing is true "value creation" (Service industry is only "value-substitution") the workforce base is losing a base of creative innovation Other responses: 1. The reduction in the manufacturing industry of the area as it migrates toward the service sector. This is causing erosion in the manufacturing skill base which cannot be taught in the school system. 2. Multi-language speakers are in high demand Other responses: 1. Keeping and growing the manufacturing companies in the area. Eugene has an anti-industry attitude. 2. Work ethic; team work; communications; cultural competency. LANE WORKFORCE PARTNERSHIP 48

51 3. Many of our products are being outsourced and so the viability of our manufacturing site in Eugene is threatened. 4. Finding qualified applicants who are seeking a career and not just a job. 5. Understanding the future needs and direction of the manufacturing business sector in Lane County. 6. Providing healthcare 2. What impact has the economic downturn had on your business? (Check all that apply) 2009 Other responses: 1. No real impact 2. Loss of employee programs likes rewards programs 3. Business has been essentially flat year to year. 4. Reduced rate of planned hiring 5. We did not process milk 2 days in December due to semi-flat orders 6. Negative impact on morale. 7. We have increased training to improve competitiveness and make sure we are fully prepared as the economy recovers. 8. The present economy has made qualified applicants plentiful. 9. We have not had a downturn. 10. We didn't lay off anyone. If someone left we didn't fill the position until needed. 11. Revealed over-crewing; even when the economy recovers, the current environment has shown that the workforce is over-crewed. LANE WORKFORCE PARTNERSHIP 49

52 3. What are the most difficult challenges you face in hiring a qualified and motivated workforce? 2009 Other responses: 1. Applicants do not follow instructions on the application, if they don't follow those instructions will they follow work instructions? 2. We have an over abundance of qualified applicants. 3. Work ethic lacking 4. No one leaves here, so openings rarely come up. 5. Due to the current economy we have not expanded our workforce to any significant degree in the past year. The opposite is true, in fact. That being said, we are operating very leanly and if we do get the opportunity to expand, we will have difficulty locating local applicants for some of the highly specialized engineering positions. 6. We have not been able to rehire anyone that has been laid off since 10/08. It is becoming increasingly difficult to maintain the motivation needed. 7. Usually have to look outside of Oregon for Technicians 8. We are not hiring 9. Government benefit package is hard to compete with. Insurance co-pay and days off Other responses: 1. Fewer people want to work in the wood products industry. 2. A lot of younger workers, especially professional workers, do not choose a company, but a city. It is difficult to compete with San Diego, Seattle and Portland. Generation Y wants to live in the cool city how can we make the answer Eugene? 3. Psychological dysfunctions of applicants: Inability to resolve conflict, emotional liability, helplessness Other responses: 1. Honestly, motivated employees. In my experience comparing the "energy" and "drive" of the employees in the Eugene area to that of other regions I've worked (Midwest, Colorado, Seattle) is LANE WORKFORCE PARTNERSHIP 50

53 poor. It's very disappointing to see but there is a pervasive sense of "entitlement" in Eugene that is a serious problem long term. We have considered relocation at various times due primarily to this issue. Similarly, there are not high numbers of motivated well trained staff. Without vibrant business community young professionals go to Portland, Seattle, San Francisco and otherwise Qualified engineers and technicians have been especially difficult to replace in the last couple of years. Eugene has so little high tech industry that there is not a large pool of qualified people to draw from. Hiring outside of the area means taking the risk that the new employee and his/her family will not like living in the Willamette Valley. 3. Young people don't think of wood products as a viable career choice. 4. Understanding the nature and availability of skills training resources in Lane County. 4. What types of positions do you find most difficult to fill? 2009 Other responses: 1. Route Sales Representatives & Merchandisers 2. Again, there are no positions to fill, on the bright side all of our workers have been crosstraining all year. 3. None 4. We are not hiring 5. Delivery drivers 6. Limited Maintenance Electricians (Oregon LME) 2008 Other responses: 1. Journey Millwrights or Electricians 2. Electricians 3. Electricians, Millwrights 4. Production Spray Finishers LANE WORKFORCE PARTNERSHIP 51

54 5. Sales 6. Frontline Supervisors 2007 Other responses: 1. Electricians 2. Qualified painters 3. Maintenance and electricians 4. Interior design 5. Burning Machine Operators 6. Highly skilled cabinet manufacturers 7. Engineers, Interior Designers 8. Because of costs, we are unable to hire workers to fill training positions but when our workforce reaches 55+ we will have a real problem replacing qualified operators. 9. IT Program Analyst; maintenance, i.e. millwrights, electricians, forestry personnel 10. Sales 5. What types of employees are expected to be in short supply over the next 3 years? 2009 Other responses: 1. Estimators 2. Saw Filers, electricians. 3. Limited Maintenance Electricians (Oregon LME) 2008 Other responses: 1. Welders, Fabricators, Journey Level Maintenance Persons 2. State Carded Millwrights and/or Electricians 3. Skilled Technical Workers, i.e. Machinists, Tool and Die Makers LANE WORKFORCE PARTNERSHIP 52

55 2007 Other responses: 1. Electricians and specialty positions 2. Highly skilled cabinet manufacturers 3. Maintenance electricians 4. When I get a firm grasp on where the manufacturing sector is headed I will be better prepared to answer this question. 6. What skills will employees need more of over the next 3 years? 2009 Other responses: 1. Problem solving skills (mentioned twice) 2. Sales skills 2008 Other responses: None listed 2007 Other responses: 1. Sales skills LANE WORKFORCE PARTNERSHIP 53

56 7. What methods or ideas have you found especially useful in hiring and maintaining a qualified workforce? 2009 Other responses: hours a week full time 2. Offering tuition assistance to help employees upgrade their skills 3. Nothing has been very helpful. 4. Local, healthy & family-owned business is attractive 5. Benefits and fun perks are good for about 3 years, but the wage & bonuses are always the MOST important. 6. Steady employment 2008 Other responses: None listed 2007 Other responses: 1. Stable employment 2. A good job with a good company offering good wages and long-term employment. LANE WORKFORCE PARTNERSHIP 54