State of the Workforce Report IX: Region 3

Transcription

1 State of the Workforce Report IX: Region 3 Funding for this project was provided by Alabama Department of Economic and Community Affairs Alabama Department of Labor Alabama Department of Postsecondary Education June 2015 Alabama Industrial Development Training Center for Business and Economic Research Culverhouse College of Commerce University of Alabama Center for Economic Development Institute for Social Science Research The University of Alabama

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3 State of the Workforce Report IX: Region 3 June 2015 Samuel Addy, Ph.D., Director and Research Economist Kilungu Nzaku, Ph.D., Assistant Research Economist Ahmad Ijaz, Associate Director & Director of Economic Forecasting Sarah Cover, Economic Forecaster Viktoria Riiman, Socioeconomic Research Associate Arben Skivjani, Economic Forecaster Gregg Bell, Ph.D., Socioeconomic Research Associate Center for Business and Economic Research Culverhouse College of Commerce The University of Alabama Box , Tuscaloosa, AL Tel: (205) Fax: (205) uacber@cba.ua.edu by Dissemination: Nisa Miranda, Director, University of Alabama Center for Economic Development Underemployment Survey: Debra McCallum, Research Social Scientist and Director of the Capstone Poll Michael Conaway, Project Coordinator for the Capstone Poll Institute for Social Science Research State of the Workforce Report IX: Region 3 UA/CBER i

4 Acknowledgments Completion of this project was due to the timely contributions of many people. We are very grateful to the Labor Market Information (LMI) Division of the Alabama Department of Labor (ADOL). In addition to financial support from ADOL, LMI provided significant staff time and this report would not have been possible without large amounts of data from LMI. Many thanks also to our colleagues at the Center for Business and Economic Research, the Capstone Poll, the Institute for Social Science Research, and the University Center for Economic Development for their help on various phases of this research project. Last, but not least, much gratitude is owed to the thousands of Alabamians who responded to the extensive survey on the state s workforce and related issues, as well as to the community and industry leaders whose work on these issues provides the critical data required in reports of this kind. Funding for this project was provided by: Alabama Department of Economic and Community Affairs Alabama Department of Labor Alabama Department of Postsecondary Education Alabama Industrial Development Training The University of Alabama ii UA/CBER State of the Workforce Report IX: Region 3

5 Contents Acknowledgments ii Summary iv Labor Utilization and Supply Flows vi Workforce Supply 1 Labor Force Activity 1 Commuting Patterns 3 Population 3 Per Capita Income 5 Educational Attainment 5 Underemployment and Available Labor 7 Workforce Demand 11 Industry Mix 11 Job Creation and Net Job Flows 12 High-Demand, Fast-Growing, High-Earning, and Sharp-Declining Occupations 13 Skills and Skills Gap Analyses 17 Education and Training Issues 20 Implications and Recommendations 23 State of the Workforce Report IX: Region 3 UA/CBER iii

6 Summary This report analyzes workforce supply and demand issues using available metrics of workforce characteristics for Workforce Development Region 3 and presents some implications and recommendations. Region 3 had a 5.2 percent unemployment rate in April 2015, with 7,039 unemployed. An underemployment rate of 28.1 percent for 2014 means that the region has a 43,175-strong available labor pool that includes 36,136 underemployed workers who are looking for better jobs and are willing to commute farther and longer for such jobs. Net out-commuting rose from 5,388 in 2005 to 5,742 in Increased commuting within the region and higher in- and out-commuting levels led to congestion, which can slow economic development. Congestion worsened in 2014 from 2013 and so continuous maintenance and development of transportation infrastructure and systems is needed to avoid interruptions. By sector the top five employers in the region are manufacturing; educational services; health care and social assistance; retail trade; and accommodation and food services. In the second quarter of 2014 these five industries provided 68,297 jobs, about 65 percent of the regional total. Two of the leading employers manufacturing and educational services paid higher wages than the region s $3,127 monthly average. Economic development should continue to diversify and strengthen the region s economy by retaining, expanding, and attracting more high-wage providing industries. Workforce development should also focus on preparing workers for such industries. On average 4,905 jobs were created per quarter from second quarter 2001 to second quarter 2014; quarterly net job flows averaged 458. Job creation is the number of new jobs that are created either by new businesses or through expansion of existing firms. Net job flows reflect the difference between current and previous employment at all businesses. The top five high-demand occupations are Team Assemblers; Registered Nurses; First-Line Supervisors of Production and Operating Workers; General and Operations Managers; and Construction Laborers. The top five fast-growing occupations are Personal Financial Advisors; Logisticians; Industrial Engineering Technicians; Helpers Brickmasons, Blockmasons, Stonemasons, and Tile and Marble Setters; and Team Assemblers. The top 50 high-earning occupations are in management, engineering, health, architecture, postsecondary education, and computer fields and have a minimum salary of $74,393. Seven of the top 10 occupations are in health care and the remaining three are in management. Of the top 40 high-demand, the top 20 fast-growing, and 50 high-earning occupations, four Industrial Engineers; Computer Systems Analysts; Software Developers, Applications; and Architects, Except Landscape and Naval belong to all three categories. Eleven occupations are both high-demand and high-earning and 15 are both high-demand and fast-growing. iv UA/CBER State of the Workforce Report IX: Region 3

7 Of the region s 638 occupations, 53 are expected to decline over the 2012 to 2022 period, with 20 occupations falling by at least nine percent and losing a minimum of 10 jobs each. Education and training for these 20 occupations should slow accordingly. Skill and education requirements for jobs keep rising. Educational and training requirements of high-demand, fast-growing, and high-earning occupations demonstrate the importance of education in developing the future workforce. In the future, more jobs will require postsecondary education and training at a minimum. The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs indicates a strong need for training in these skills. For Region 3 the pace of training needs to increase for technical, systems, and resource management skills. The scale of training should be raised for basic and social skills. Ideally, all high school graduates should possess basic skills so that postsecondary and higher education can focus on other and more complex skills. Employers should be an integral part of planning for training as they can help identify future skill needs and any existing gaps. From a 2012 base, worker shortfalls of about 9,600 for 2022 and 14,000 for 2030 are expected. This will demand a focus on worker skills and expected shortfalls through Worker shortfalls for critical occupations will also need to be addressed continuously. Strategies to address skill needs and worker shortfalls might include: (1) improvements in education and its funding; (2) use of economic opportunities to attract new residents; (3) focus on hard-to-serve populations (e.g. out-of-school youth); (4) lowering the high school dropout rate; (5) continuation and enhancement of programs to assess, retrain, and place dislocated workers; (6) encouragement of older worker participation in the labor force; and (7) facilitation of incommuting. Improving education is important because (i) a highly educated and productive workforce is a critical economic development asset, (ii) productivity rises with education, (iii) more educated people are more likely to work, and (iv) it yields high private and social rates of return on investment. Workforce development must view all of education and other programs (e.g. adult education, career technical training, worker retraining, career readiness, etc.) as one system. Funding to support workforce development may require tax reform at state and local levels and should provide for flexibility as workforce needs change over time and demand different priorities. Publicizing both private and public returns to education can encourage individuals to raise their own educational attainment levels and also promote public and legislative support for education. Higher incomes that come with improved educational attainment and work skills will help to increase personal income for the region as well as raise additional local (county and city) tax revenues. This is important, especially for a region that has relatively high population and labor force growth rates. Both workforce development and economic development are very essential components in building a strong, well-diversified regional economy. State of the Workforce Report IX: Region 3 UA/CBER v

8 Labor Utilization and Supply Flows Source: Addy et al 1 and Canon et al 2 The chart above presents labor utilization and supply flows that explain labor market dynamics in view of recent study findings. The civilian noninstitutional population age 16 and above is comprised of participants in the labor force and nonparticipants. The labor force is made of employed and unemployed persons; the unemployed do not have a job but are actively searching for work. Employed persons include fully employed and underemployed persons in all categories of work (full-time, voluntary part-time, and involuntary part-time). Nonparticipants in the labor force include retirees (voluntary and involuntary), people who do not want to or cannot work for various reasons (e.g., disability, caring for family members, in school or training, etc.), discouraged workers, and other labor force reserve. It has been suggested that a subgroup of nonparticipants referred to as the waiting group is more likely than the rest of the nonparticipants to take a job if wages and conditions are satisfactory, but people in this group do not actively search for work. New evidence has shown that between January 2003 and August 2013, the flow of nonparticipants into employment was 1.6 times that of unemployed persons transitioning into employment, which may be due to the presence of the waiting group 1, 2. Nonparticipant flows to employment are larger in services, management, and professional occupations while unemployed flows to employment are higher in physically intensive occupations such as construction workers and miners. Industry effects should vary by the type and number of occupations they contain. This finding enhances the common understanding of labor market dynamics and influences workforce availability and skills gap analyses. 1 Addy, S.N., Bonnal, M., and Lira, C. (2012). Towards a More Comprehensive Measure of Labor Underutilization: The Alabama Case, Business Economics, vol. 47(3). 2 Canon, M.E., Kudlyak, M., and Reed, M. (2014). Not Everyone Who Joins the Ranks of the Employed was Unemployed, The Regional Economist, January. vi UA/CBER State of the Workforce Report IX: Region 3

9 Workforce Supply Labor Force Activity The labor force includes all persons in the civilian noninstitutional population who are age 16 and over and who have a job or are actively looking for one. Typically, those who have no job and are not looking for one are not included (e.g. students, retirees, discouraged workers, and the disabled). Table 3.1 shows labor force information for Region 3 and its seven counties for 2014 and for April Alabama labor force information is available from the Labor Market Information (LMI) Division of the Alabama Department of Labor. LMI compiles data in cooperation with the U.S. Bureau of Labor Statistics. Table 3.1 Region 3 Labor Force Information 2014 Annual Average Labor Force Employed Unemployed Rate (%) Bibb 8,560 7, Fayette 6,281 5, Greene 3,000 2, Hale 6,142 5, Lamar 5,547 5, Pickens 7,429 6, Tuscaloosa 96,911 91,140 5, Region 3 133, ,004 8, Alabama 2,150,118 2,003, , United States 155,922, ,305,000 9,616, April 2015 Labor Force Employed Unemployed Rate (%) Bibb 8,584 8, Fayette 6,289 5, Greene 2,967 2, Hale 6,121 5, Lamar 5,554 5, Pickens 7,475 7, Tuscaloosa 98,738 94,075 4, Region 3 135, ,689 7, Alabama 2,151,559 2,036, , United States 156,554, ,587,000 7,966, Source: Alabama Department of Labor and U.S. Bureau of Labor Statistics. The recession that began in December 2007 increased the number of unemployed and raised county unemployment rates. A slow recovery has kept county unemployment high in a range of 6.0 percent to 12.6 percent for 2014 (6.6 percent for the region) and between 4.7 percent and 9.8 percent in April 2015, with 5.2 percent for the region. The unemployment rate was lowest in Tuscaloosa County and highest in Greene. Tuscaloosa was the only county in the region with an unemployment rate below Alabama s 5.3 percent. Annual unemployment rates for 2000 to 2014 are shown in Figure 3.1. The region s unemployment rates were low before the 2001 and the most recent recession. The 2002 and 2003 highs of 5.3 percent were due to the effects of the recession of 2001, but successful state and local economic development State of the Workforce Report IX: Region 3 UA/CBER 1

10 efforts reduced unemployment to record lows before the recent financial crises and recession. In 2009 unemployment increased to a record high of 10.3 percent but has been declining since then. In 2014 the rate dropped to 6.6 percent. Year-to-date monthly labor force data point to a lower regional unemployment rate for 2015 than seen in Despite strong ongoing economic development efforts, the slow recovery from the latest recession and structural changes in the region s economy are expected to keep unemployment somewhat high for a few more years. Figure 3.1 Region 3 Unemployment Rate 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Source: Alabama Department of Labor. Nonagricultural employment of the region s residents averaged 101,442 quarterly from the second quarter of 2001 to the second quarter of 2014 (Figure 3.2). The number of jobs declined steadily from the fourth quarter of 2008 through the third quarter of 2009 and remained flat until third quarter Since then nonagricultural employment has been trending up slowly and by the second quarter 2014 it was approaching pre-recession levels. Figure 3.2 Region 3 Nonagricultural Employment 120, , ,000 90,000 Source: Alabama Department of Labor and U.S. Census Bureau. Table 3.2 shows worker distribution by age in Region 3 for the second quarter of The region s workforce is younger than Alabama s. Older workers, age 55 and over, are 19.5 percent of the region s nonagricultural employment versus 20.7 percent for the state. Those who are age 65 and over constitute 3.9 percent of nonagricultural employment compared to 4.9 percent for Alabama. Even so, labor force participation of younger residents must increase to meet long term occupational projections for growth and replacement; otherwise older workers may have to work longer. 2 UA/CBER State of the Workforce Report IX: Region 3

11 Table 3.2 Workers by Age Group (Second Quarter 2014) Age group Nonagricultural Employment Number Percent , , , , , , , and over total 20, Total all ages 105, Note: Rounding errors may be present. Nonagricultural employment is by place of work, not residence. Source: U.S. Census Bureau, Local Employment Dynamics Program. Commuting Patterns In 2005 about 5,400 more residents commuted out of the region for work than commuted in (Table 3.3). In 2006 commuter inflow jumped up while outflow shrunk due to economic development successes, reducing net commuting to just 324. However, commuter outflow picked up since then and net commuting increased to 5,742 in There is significant commuting inside the region as well but most of commuting is into and out of Tuscaloosa County. Table 3.3 also shows that the one-way average commute time and distance for workers are up in 2014 compared to More workers are commuting for longer times and distances implying that congestion worsened in the region. Congestion will continue posing challenges in problematic areas such as the Tuscaloosa metropolitan area. Thus, regional transportation infrastructure and systems must be maintained and developed to ensure that the flow of goods and movement of workers are not interrupted. Congestion can impede this mobility and slow economic development. Population In 2010, population in Region 3 was 293,927, about 10 percent more than in 2000 (Table 3.4). However, population grew in two counties (Bibb and Tuscaloosa) and shrank in all the others. Although population grew in only two counties, the region s population growth was faster than Alabama s 7.5 percent. Population growth was fastest in Tuscaloosa County. Fayette, Greene, Hale, Lamar, and Pickens counties lost residents within the last decade. The 2014 population estimate shows that the region s population has grown by 2.0 percent compared to the state s 1.5 percent. Population grew in Tuscaloosa and Pickens counties but declined in all the others. Table 3.5 shows population counts, estimates, and projections by age group. The population aged 65 and over grows rapidly after 2010, with the first of the baby boom generation turning 65 years old. Growth of the prime working age group (20-64) and youth (0-19) is expected to lag that of the total population and poses a challenge for workforce development. If employment growth outpaces labor force growth as is expected in the medium and long term, communities that experience rapid job gains may need to consider investments in amenities and infrastructure to attract new residents. State of the Workforce Report IX: Region 3 UA/CBER 3

12 Table 3.3 Commuting Patterns Year Region 3 Inflow Region 3 Outflow Number Number ,299 27, ,135 26, ,786 32, ,259 31, ,400 31, ,291 33, ,984 33,726 Region 3 Inflow, 2011 Outflow, 2011 Counties Number Percent Number Percent Bibb 2, , Fayette 2, , Greene , Hale 1, , Lamar 1, , Pickens 1, , Tuscaloosa 30, , Percent of workers Average commute time (one-way) 2005/ Less than 20 minutes to 40 minutes minutes to an hour More than an hour Average commute distance (one-way) 2005/ Less than 10 miles to 25 miles to 45 miles More than 45 miles Note: Rounding errors may be present. Source: U.S. Census Bureau; Alabama Department of Labor; and Center for Business and Economic Research, The University of Alabama. Table 3.4 Region 3 Population Change % change Change % change Census Census Census Estimate Bibb 16,576 20,826 22,915 22,506 2, Fayette 17,962 18,495 17,241 16,874-1, Greene 10,153 9,974 9,045 8, Hale 15,498 17,185 15,760 15,184-1, Lamar 15,715 15,904 14,564 14,086-1, Pickens 20,699 20,949 19,746 20,365-1, Tuscaloosa 150, , , ,212 29, , Region 3 247, , , ,780 25, , Alabama 4,040,587 4,447,100 4,779,736 4,849, , , United States 248,709, ,421, ,745, ,857,056 27,323, ,111, Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau. 4 UA/CBER State of the Workforce Report IX: Region 3

13 Table 3.5 Population by Age Group and Projections Age Group ,831 78,812 76,688 80,162 80, ,257 32,631 35,502 35,768 36, ,834 19,618 18,994 20,266 20, ,275 17,771 18,578 19,033 20, ,707 17,935 16,964 18,984 19, ,689 17,197 17,472 18,386 17, ,729 19,126 18,084 18,103 19, ,247 19,648 19,287 17,755 17, ,442 18,637 19,120 18,395 17, ,636 15,620 16,765 19,060 17, ,561 36,932 38,650 52,783 61, Total 157, , , , ,233 Total Population 268, , , , ,548 Change from % 4.8% % 3.6% Total Population 7.6% 11.3% Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau. Per Capita Income Per capita income (PCI) in Region 3 was at $33,919 in 2013 (Figure 3.3), up 50 percent from 2000, and $2,562 below the state average of $36,481. Per capita income was below the state average in all the seven counties. Tuscaloosa County had the highest PCI with $36,095 and Bibb had the lowest at $25,352. Figure 3.3 Region 3 Per Capita Income $22,539 $23,626 $23,981 $24,835 $26,100 $27,677 $28,945 $30,316 $31,227 $30,590 $31,629 $32,513 $33,443 $33, Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama. Educational Attainment Educational attainment in 2009 to 2013 of Region 3 residents who were 25 years old and over is shown in Table 3.6 and Figures 3.4 and 3.5. About 83 percent graduated from high school and 22 percent held a bachelor s or higher degree. Tuscaloosa County has higher educational attainment than the other six counties, the region, and the state as a whole. Educational attainment is important as skills rise with education and high-wage jobs for the 21st century demand more skill sets. State of the Workforce Report IX: Region 3 UA/CBER 5

14 Table 3.6 Educational Attainment of Population 25 Years and Over, Bibb Fayette Greene Hale Lamar Pickens Tuscaloosa Region 3 Total 15,340 11,974 6,015 10,492 10,164 13, , ,507 No schooling completed ,106 2,341 Nursery to 4th grade th and 6th grade ,913 7th and 8th grade ,998 4,736 9th grade ,090 4,580 10th grade ,620 6,662 11th grade ,793 6,633 12th grade, no diploma ,839 3,386 High school graduate/equivalent 6,256 4,677 2,367 4,319 3,877 5,584 36,284 63,364 Some college, less than 1 year ,938 9,781 Some college, 1+ years, no degree 2,285 1, ,367 1,520 1,790 20,535 29,606 Associate degree ,128 11,058 Bachelor s degree 1, ,830 23,993 Master s degree ,677 10,945 Professional school degree ,260 2,536 Doctorate degree ,885 2,153 Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau. Figure 3.4 High School Graduate or Higher, % 74.9% 76.2% 77.4% 76.1% 79.7% 86.6% 83.2% Figure 3.5 Bachelor's Degree or Higher, % 13.2% 12.8% 12.8% 9.5% 11.0% 27.0% 21.5% Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau. 6 UA/CBER State of the Workforce Report IX: Region 3

15 Underemployment and Available Labor Labor force data are often limited to information on the employed and the unemployed that is available from government sources. However, this information is not complete from the perspective of employers. New or expanding employers are also interested in underemployment because current workers are potential employees. In fact, experience requirements in job ads are evidence that many prospective employers look beyond the unemployed for workers. Workers in occupations that underutilize their experience, training, and skills are underemployed. These workers might look for other work because their current wages are below what they believe they can earn or because they wish to not be underemployed. Underemployment occurs for various reasons including (i) productivity growth, (ii) spousal employment and income, and (iii) family constraints or personal preferences. Underemployment is unique to areas because of the various contributing factors combined with each area s economic, social, and geographic characteristics. The existence of underemployment identifies economic potential that is not being realized. It is extremely difficult to measure this economic potential because of uncertainties regarding additional income that the underemployed can bring to an area. It is clear, however, that underemployment provides opportunities for selective job creation and economic growth. A business that needs skills prevalent among the underemployed could locate in places that have such workers regardless of those areas unemployment rates. A low unemployment rate, which may falsely suggest limited labor availability, is therefore not a hindrance to the business. The underemployed present a significant labor pool because they tend to respond to job opportunities that they believe are better for reasons that include (i) higher income, (ii) more benefits, (iii) superior terms and conditions of employment, and (iv) a better match with skills, training, and experience. The underemployed also create opportunities for entry level workers as they leave lower-paying jobs for better-paying ones. Even if their previously-held positions are lost or not filled (perhaps due to low unemployment or adverse economic conditions), there is economic growth in gaining higher-paying jobs. Such income growth boosts consumption, savings, and tax collections. Quantifying the size of the underemployed is a necessary first step in considering this group for economic development, workforce training, planning, and other purposes. It is important to note that the underemployed can take on more responsibilities and earn more income, but they cannot be counted on to address possible future worker shortages as they are already employed. Region 3 had an underemployment rate of 28.1 percent in Applying this rate to April 2015 labor force data means that 36,136 employed residents were underemployed (Table 3.7). Adding the unemployed gives a total available labor pool of 43,175 for the region. This is 6.1 times the number of unemployed and is a more realistic measure of the available labor pool in the region. Prospective employers must be able to offer the underemployed higher wages, better benefits or terms of employment, or some other incentives to induce them to change jobs. Underemployment rates ranged from 20.0 percent for Bibb County to 35.9 percent for Greene. Greene County had the smallest available labor pool and Tuscaloosa had the largest. The underemployed are willing to commute farther and longer for a better job. For the one-way commute, 43.4 percent are prepared to travel for 20 or more minutes longer and 35.5 percent will go 20 or more extra miles. State of the Workforce Report IX: Region 3 UA/CBER 7

16 Table 3.7 Underemployed and Available Labor by County Region 3 Bibb Fayette Greene Hale Lamar Pickens Tuscaloosa Labor Force 135,728 8,584 6,289 2,967 6,121 5,554 7,475 98,738 Employed 128,689 8,074 5,896 2,676 5,712 5,225 7,031 94,075 Underemployment rate 28.1% 20.0% 32.5% 35.9% 22.2% 27.5% 26.8% 30.6% Underemployed workers 36,136 1,615 1, ,269 1,437 1,886 28,749 Unemployed 7, ,663 Available labor pool 43,175 2,125 2,309 1,252 1,678 1,766 2,330 33,412 Note: Rounding errors may be present. Based on April 2015 labor force data and 2014 underemployment rates. Source: Center for Business and Economic Research, The University of Alabama and Alabama Department of Labor. Underemployment rates for counties, Workforce Development Regions (WDRs), and the state were determined from an extensive survey on the state s workforce. A total of 832 complete responses were obtained from Region 3. About 38 percent (317 respondents) were employed, of whom 89 stated that they were underemployed. A lack of job opportunities in their area, low wages at available jobs, living too far from jobs, owning a house in the area, childcare responsibilities, and spouses having a good job are the primary reasons given for being underemployed. Ongoing economic development efforts can help in this regard. Nonworkers cite retirement and disability or other health concerns as the main reasons for their status, but some also cite a lack of job opportunities in their area, social security limitations, living too far from jobs, and low wages at the availale jobs as additional major reasons. Such workers may become part of the labor force if their problems can be addressed. Indeed a recent study found that the flow of labor force nonparticipants to employment status was 60 percent more than that of unemployed workers who gain employment. 3 This implies that the region s available labor pool could be larger than estimated in this report. A comparison of underemployed workers to the overall workforce in Region 3 shows that: Fewer work full-time and more of the part-timers would like to work full-time. More hold multiple jobs. They commute shorter distances and times. More work in office and administrative support; sales; personal care and service; building and grounds cleaning and maintenance; protective services; food preparation and serving; healthcare support; and education, training, and library occupations. More are in retail trade; information; management of companies and enterprises; educational services; accommodation and food services; administrative support and waste management and remediation services; arts, entertainment, and recreation; accommodation and food services; and other services industries. They earn less and have shorter job tenure. Fewer believe their jobs fit well with their education and training and skills. More believe they are qualified for a better job. More would leave their current jobs for higher income. More are willing to commute longer and farther for a better job. 3 Canon, M.E., Kudlyak, M., and Reed, M. (2014). Not Everyone Who Joins the Ranks of the Employed was Unemployed, The Regional Economist, January. 8 UA/CBER State of the Workforce Report IX: Region 3

17 Fewer are satisfied with their current jobs. More are willing to train for a better job. More have sought better jobs in the preceding quarter. They are more likely to have an associate degree and 4-year college degrees but less likely to have postgraduate education. Fewer are married but they have the same median age as other employees. More are African-American or other nonwhite ethnic groups. More are Hispanic and fewer are white. Table 3.8 shows the detailed survey results on job satisfaction and willingness to train. Responses for overall job satisfaction as well as various aspects of the job were obtained. In general most of the region s workers (76.0 percent) are satisfied or completely satisfied with their jobs. Workers are most satisfied with the work they do and least satisfied with the earnings they receive. Clearly, fewer underemployed workers are satisfied with their jobs (56.2 percent). The underemployed are also much more dissatisfied with their earnings and most satisfied with their commuting distance. Workers are generally willing to train for a new or better job, with the underemployed being much more willing (73.7 percent vs percent). However, the willingness to train is strongly influenced by who pays for the cost of training. Workers typically do not wish to pay for the training and so their willingness is highest when the cost is fully borne by government and lowest when the trainee must pay the full costs. The underemployed are more willing to train for the new or better job except when they have to pay the full cost of the training. The results strongly show that workers expect the government to bear at least a part of the training cost. This expectation may result from worker awareness of government workforce programs that provide such assistance. State of the Workforce Report IX: Region 3 UA/CBER 9

18 Table Job Satisfaction and Willingness to Train (Percent) Job Satisfaction Completely Dissatisfied Dissatisfied Neutral Satisfied Completely Satisfied Employed Overall Earnings Retention Work Hours Shift Conditions Commuting Distance Underemployed Overall Earnings Retention Work Hours Shift Conditions Commuting Distance Willingness to Train Completely Unwilling Unwilling Neutral Willing Completely Willing Employed For a new or better job If paid by trainee If paid by trainee and government If paid by government Underemployed For a new or better job If paid by trainee If paid by trainee and government If paid by government Note: Rounding errors may be present. Source: Center for Business and Economic Research, The University of Alabama. 10 UA/CBER State of the Workforce Report IX: Region 3

19 Workforce Demand Industry Mix The manufacturing sector was the leading employer with 16,942 jobs in the second quarter of 2014 (Table 3.9). Rounding out the top five industries by employment are educational services; health care and social assistance; retail trade; and accommodation and food services. These five industries provided 68,297 jobs, 64.5 percent of the regional total. The average monthly wage across all industries in the region was $3,127; two leading employers manufacturing and educational services paid more. The highest average monthly wages were for mining at $7,095, management of companies and enterprises at $4,717; manufacturing $4,604; utilities $4,489; wholesale trade at $4,242; and professional, scientific, and technical services with $4,179. At $1,125, accommodation and food services paid the least. New hire monthly earnings averaged $2,032, about 65 percent of the region s average monthly wage. Mining had the highest average monthly new hire wages with $6,210, followed by utilities at $3,602, wholesale trade with $3,535, and manufacturing with $3,358. Accommodation and food services paid newly hired workers the least, $921. Table 3.9 Industry Mix (Second Quarter 2014) Average Monthly Wage Average Monthly New Hire Earnings Industry by 2-digit NAICS Code Total Employment Share Rank 11 Agriculture, Forestry, Fishing and Hunting % 16 $2,632 $2, Mining 2, % 13 $7,095 $6, Utilities % 20 $4,489 $3, Construction 5, % 7 $3,336 $2, Manufacturing 16, % 1 $4,604 $3, Wholesale Trade 2, % 14 $4,242 $3, Retail Trade 11, % 4 $2,024 $1, Transportation and Warehousing 3, % 9 $3,211 $2, Information % 18 $3,696 $2, Finance and Insurance 2, % 11 $3,758 $2, Real Estate and Rental and Leasing 1, % 15 $2,692 $1, Professional, Scientific, and Technical Services 3, % 10 $4,179 $3, Management of Companies and Enterprises % 19 $4,717 $2, Administrative and Support and Waste Management and Remediation Services 6, % 6 $1,866 $1, Educational Services 14, % 2 $3,241 $1, Health Care and Social Assistance 14, % 3 $3,002 $2, Arts, Entertainment, and Recreation % 17 $1,645 $ Accommodation and Food Services 10, % 5 $1,125 $1, Other Services (Except Public Administration) 2, % 12 $1,927 $1, Public Administration 4, % 8 $3,642 $2,293 ALL INDUSTRIES 105, % $3,127 $2,032 Source: Alabama Department of Labor and U.S. Census Bureau. State of the Workforce Report IX: Region 3 UA/CBER 11

20 By broad industry classification, service providing industries generated 71.7 percent of jobs in second quarter 2014 (Figure 3.6). Goods producing industries were next with 24.0 percent and public administration accounted for 4.3 percent. The distribution is for all nonagricultural jobs in the region, but there is significant variation by county. Public Administration Service Providing Goods Producing Figure 3.6 Region 3 Employment Distribution 4.3% 24.0% 71.7% 0% 20% 40% 60% 80% 100% Source: Alabama Department of Labor and U.S. Census Bureau. Job Creation and Net Job Flows On average, 4,905 jobs were created per quarter from second quarter 2001 to second quarter 2014 (Figure 3.7); quarterly net job flows averaged 458 (Figure 3.8). Both job creation and net job flows slightly rose in the first quarter of 2010 and have remained flat since then. Quarterly net job flows fluctuate considerably and have ranged from a loss of 2,095 to a gain of 4,887. Job creation refers to the number of new jobs that are created either by new area businesses or through the expansion of existing firms. Net job flows reflect the difference between current and previous employment at all businesses. 15,000 10,000 5,000 0 Figure 3.7 Job Creation in Region 3 Figure 3.8 Region 3 Net Job Flows 6,000 1,000-4,000 Source: Alabama Department of Labor and U.S. Census Bureau. 12 UA/CBER State of the Workforce Report IX: Region 3

21 High-Demand, Fast-Growing, High-Earning, and Sharp-Declining Occupations Workforce Development Region 3 has 638 single occupations excluding occupational categories. Table 3.10 shows the 40 occupations that are expected to be in high-demand, ranked by projected average annual job openings over the 2012 to 2022 period. Many of these occupations are common to one of the five largest employment sectors identified earlier (Table 3.9): health care and social assistance. Thus, this sector will continue to dominate employment in the region. The top five high-demand occupations are Team Assemblers; Registered Nurses; First-Line Supervisors of Production and Operating Workers; General and Operations Managers; and Construction Laborers. Fifteen of the high-demand occupations are also fast-growing. This means that these 15 occupations have a minimum annual growth rate of 1.84 percent, much faster than the 1.06 percent average occupational growth rate for both the region and 0.99 percent the state. The 20 fastest growing occupations ranked by projected growth of employment are listed in Table Many of these occupations are related to construction; manufacturing; professional, scientific, and technical services; and health care and social assistance. The top five fast-growing occupations are Personal Financial Advisors; Logisticians; Industrial Engineering Technicians; Helpers Brickmasons, Blockmasons, Stonemasons, and Tile and Marble Setters; and Team Assemblers. Table 3.12 shows the 50 selected highest earning occupations in the region. These occupations are mainly in management, engineering, health, computer, postsecondary education, and business fields and have a minimum mean salary of $74,393. Seven of the top 10 listed are health occupations and three are in management. Any discussion of earnings must consider that wages vary with experience. Occupations with the highest entry wages may not necessarily have the highest average or experienced wages. The selected high-earning occupations are generally not fast-growing or in high-demand. Eleven occupations are both high-earning and in high-demand (Table 3.10). Only four occupations Computer Systems Analysts; Software Developers, Applications; Architects, Except Landscape and Naval; and Industrial Engineers are in high-demand, fast-growing, and high-earning. Of the region s 638 occupations, 53 are expected to decline over the 2012 to 2022 period. Employment in the 20 sharpest-declining occupations will fall by at least nine percent, with each losing a minimum of 10 jobs over the period (Table 3.13). No efforts should be made to sustain these occupations because they are declining because of structural changes in the economy of the region. State of the Workforce Report IX: Region 3 UA/CBER 13

22 Table 3.10 Selected High-Demand Occupations (Base Year 2012 and Projected Year 2022) Average Annual Job Openings Due to Growth Due to Separations Occupation Total Team Assemblers* Registered Nurses First-Line Supervisors of Production and Operating Workers General and Operations Managers Construction Laborers Industrial Machinery Mechanics* Accountants and Auditors Industrial Engineers* Personal Care Aides* First-Line Supervisors of Construction Trades and Extraction Workers Carpenters Operating Engineers and Other Construction Equipment Operators Clergy Construction Managers Management Analysts Healthcare Social Workers Coaches and Scouts Pharmacists Cement Masons and Concrete Finishers Painters, Construction and Maintenance Medical and Health Services Managers Cost Estimators Logisticians* Meeting, Convention, and Event Planners* Market Research Analysts and Marketing Specialists Personal Financial Advisors* Computer Systems Analysts* Software Developers, Applications* Architects, Except Landscape and Naval* Electrical Engineers Industrial Engineering Technicians* Marriage and Family Therapists* Nursing Instructors and Teachers, Postsecondary* Physical Therapists Nurse Practitioners Medical and Clinical Laboratory Technicians Diagnostic Medical Sonographers* Surgical Technologists* Physical Therapist Assistants Millwrights Note: Occupations are growth- and wages-weighted and data are rounded to the nearest 5. Occupations in bold are also high-earning. * - Qualify as both high-demand and fast-growing occupations. Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama. 14 UA/CBER State of the Workforce Report IX: Region 3

23 Table 3.11 Selected Fast-Growing Occupations (Base Year 2012 and Projected Year 2022) Employment Percent Change Annual Growth (Percent) Average Annual Job Openings Occupation Personal Financial Advisors* Logisticians* Industrial Engineering Technicians* Helpers Brickmasons, Blockmasons, Stonemasons, and Tile and Marble Setters Team Assemblers* 3,780 5, Nursing Instructors and Teachers, Postsecondary* NA NA Industrial Engineers* Computer Systems Analysts* Marriage and Family Therapists* Computer-Controlled Machine Tool Operators, Metal and Surgical Technologists* Software Developers, Applications* Health Specialties Teachers, Postsecondary NA NA Diagnostic Medical Sonographers* Brickmasons and Blockmasons Helpers--Carpenters Industrial Machinery Mechanics* Personal Care Aides* Architects, Except Landscape and Naval* Meeting, Convention, and Event Planners* Note: Employment data are rounded to the nearest 10 and job openings are rounded to the nearest 5. Occupations in bold are also high-earning. NA Not available. * - Qualify as both high-demand and fast-growing occupations. Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama. State of the Workforce Report IX: Region 3 UA/CBER 15

24 Table 3.12 Selected High-Earning Occupations (Base Year 2012 and Projected Year 2022) Employment Annual Growth (Percent) Average Annual Job Openings Mean Annual Salary ($) Occupation Physicians and Surgeons, All Other ,492 Pediatricians, General ,077 Dentists, General ,036 Chief Executives ,261 Psychiatrists NA NA ,009 Podiatrists NA NA ,197 Family and General Practitioners ,117 Optometrists ,549 Architectural and Engineering Managers ,414 Marketing Managers NA NA ,755 Pharmacists* ,256 Sales Managers ,508 General and Operations Managers* 1,350 1, ,037 Financial Managers ,155 Computer Science Teachers, Postsecondary ,280 Administrative Services Managers ,724 Public Relations and Fundraising Managers NA NA ,475 Computer and Information Systems Managers ,348 Purchasing Managers ,534 Education Administrators, Postsecondary ,053 Mining and Geological Engineers, Including Mining Safety Engineers ,893 Industrial Production Managers ,198 Physician Assistants ,476 Medical and Health Services Managers* ,685 Transportation, Storage, and Distribution Managers NA NA ,937 Physics Teachers, Postsecondary NA NA ,995 Construction Managers* ,490 Chemistry Teachers, Postsecondary ,946 Human Resources Managers ,474 Psychology Teachers, Postsecondary ,638 Software Developers, Applications* ,911 Nurse Practitioners* ,516 Physical Therapists* ,114 Architects, Except Landscape and Naval* ,697 Occupational Therapists ,310 Environmental Engineers ,948 Managers, All Other ,739 Speech-Language Pathologists ,156 Industrial Engineers* ,477 Sales Representatives, Wholesale and Manufacturing, Technical and Scientific NA NA ,061 Products Computer Systems Analysts* ,262 Mechanical Engineers ,133 Engineers, All Other ,047 Veterinarians ,425 Political Science Teachers, Postsecondary ,301 Computer Occupations, All Other ,027 Loan Officers ,735 Electrical Engineers* ,599 Biological Science Teachers, Postsecondary ,580 Business Teachers, Postsecondary NA NA ,393 Note: Employment data are rounded to the nearest 10 and job openings to the nearest 5. The salary data provided are based on the May 2014 release of the Occupational Employment Statistics (OES) combined employment and wage file. Estimates for specific occupations may include imputed data. Occupations in bold are also fast-growing. NA Not available. * - Qualify as both high-earning and high-demand occupations. Source: Center for Business and Economic Research, The University of Alabama and Alabama Department of Labor. 16 UA/CBER State of the Workforce Report IX: Region 3

25 Table 3.13 Selected Sharp-Declining Occupations (Base Year 2012 and Projected Year 2022) Employment Net Change Percent Change Occupation Farmers, Ranchers, and Other Agricultural Managers 1,840 1, Meat, Poultry, and Fish Cutters and Trimmers Postal Service Mail Carriers Roof Bolters, Mining NA NA Psychiatric Aides Sewing Machine Operators Excavating and Loading Machine and Dragline Operators Textile Knitting and Weaving Machine Setters, Operators, and Tenders NA NA Couriers and Messengers Textile Winding, Twisting, and Drawing Out Machine Setters, Operators, and Tenders Data Entry Keyers Reporters and Correspondents Postal Service Clerks Office Machine Operators, Except Computer Conveyor Operators and Tenders Telecommunications Line Installers and Repairers NA NA Grinding, Lapping, Polishing, and Buffing Machine Tool Setters, Operators, and Tenders, Metal and Plastic Editors Advertising Sales Agents Mail Clerks and Mail Machine Operators, Except Postal Service Note: Employment data are rounded to the nearest 10. NA - Not available due to disclosure restrictions. Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama. Skills and Skills Gap Analyses Jobs require skill sets and it is necessary that jobholders have the relevant skills. Table 3.14 shows skill types and definitions as provided by O*NET Online, which offers skill sets for all occupations ranked by the degree of importance. High-earning occupations typically require skills that are obtained in the pursuit of the high educational attainment levels that such jobs require. Lower earning occupations require more basic skill sets. Some occupations have no minimum skill set requirements (e.g. dishwashers and maids). Table 3.15 shows the percentage of selected occupations in the region that list a particular skill as primary. We define primary skills as the 10 most important skills in the required skill set for an occupation. It is important to note that a particular skill may be more important and more extensively used in one occupation than another. Table 3.15 does not address such crossoccupational skill importance comparisons. In general, basic skills are most frequently listed as primary, which means that they are important for practically all jobs. State of the Workforce Report IX: Region 3 UA/CBER 17