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Six Mega Trends That Are Jolting Six Mega Trends That Are Jolting the U. S. Labor Marketthe U. S. Labor Market

John TwomeyA Webinar Presented by the Workforce

Development Network and NYATEP

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What We’ll Talk About Today

We all know something very different is going on in the economy, let’s take a look at the major underlying factors ?

My hope is that you will find this information something you can use to explain today’s U. S. labor market to elected officials, Workforce Investment Boards, school boards, parents and students.

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Acknowledgements

Much of the research you see here comes from the following 3 people who have worked diligently to shine a spotlight on the silent workforce crisis California and the United States faces:– Steve Gunderson, who is now CEO of the Council on

Foundations, recently of the Greystone Group; the co-author of the Jobs Revolution. http://www.jobsrevolution.com/

– Kati Haycock, the Director of the Education Trust is one of the leading child advocates in the field of education. http://www2.edtrust.org/edtrust/summaries2004/states.html

– Jared Bernstein, Director of the Living Standards Program at the Economic Policy Institute, formerly held the post of deputy chief economist at the U.S. Department of Labor. http://www.epi.org/

Any “crazy” conclusions are mine, not the result of their work.

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Because something is happening hereBut you don't know what it is

Do you, Mister Jones?- Bob Dylan

Major upheaval ahead in the Economy because:– Baby Boomer Retirements– Demographic Shifts– Increased payoff on educational attainment– Global Competition– Immigration– Off Shoring and Technology changes

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Which 2 factors do you think are most affecting today’s labor market? ( Select 2)

Baby BoomersDemographic ShiftsIncreased Education PayoffGlobal Competitor’s ActionsImmigrationOff ShoringTechnology Changes

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We’ll take a look at Now that We Know What’s Going On, What do We Do

Have we been doing the right things

If so, did we stay with them long enough to see if they work

Did we adequately fund them to meet the challenges

What else should we be doing…

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Setting the Stage

–“What business are you in”- the Iceman Cometh (and Go-eth)

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Major Drivers of Change in the Economy

Baby Boomer Retirements

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13%

48%

22%

16%

3%

37%

22%

38%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2000 2010

Traditionalist (1900-1945)Baby Boomer (1946-1964)Generation X (1965-1975)Generation Y (1976-1994)

Source: Bureau of Labor Statistics

Civilian Labor Force by GenerationNational Statistics

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Major Drivers of Change in the Economy

Shifting Demographics

Bureau of the Census 11

2003 2010 2050

White: 73% 65% 53%(Non-Hispanic)

Hispanic: 11% 16% 24%

Black: 12% 13% 14%

Asians: 5% 7.3% 11%

Workforce Diversity: National Statistics

Rohit Talwar, at CWA 4/06 12

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Major Drivers of Change in the Economy

Hugely Increased Payoff on Educational Attainment

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Employment Change by Education: 1992-2002

National Statistics

Employment Policy Foundation tabulation of BLS Statistics

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00Less than HighSchool--(-.4M jobs)High School -- +.1jobsSome College-- +2.4 M jobs2 Year Academic--+2.2 M jobs2 year Technical--+2.6 M jobs4 Year Degree-- +6.4 M jobs

Harris Interactive Polling 15

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Education Post-High School Matters National Statistics

75% of new job growth requires some level of post-high school training

1980 – 200019% growth in workers with post-high school education

2000 – 20204% growth in workers with post-high school education

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Education Trust 18

Education Trust 19

Education Trust 20

African American and Latino 17-Year-Olds Read at Same Levels As

White 13-Year-Olds

0%

100%

150 200 250 300 350

Average Scale Score

Perc

ent o

f Stu

dent

s

White 13-Year-Olds African American 17-Year-Olds Latino 17-Year-Olds

Education Trust 21

African American and Latino 17-Year-Olds Do Math at Same Levels As

White 13-Year-Olds

0%

100%

200 250 300 350

Average Scale Score

Perc

ent o

f Stu

dent

s

White 13-Year-Olds African American 17-Year-Olds Latino 17-Year Olds

Education Trust 22

Education Trust 23

An Example of How State Data Looks: California

Education Trust 24

New York vs. Top 5 States

64%55%First-time freshmen completing BA in 6 years

84%81%Freshmen at 4-year colleges returning second year

61%61%Community college freshmen returning second year

52%34%HS freshmen entering any US College

Top StatesNew York

Education Trust 25

Education Trust 26

Math and Science Classes of Mostly Minority Students Are More Often Taught

by Misassigned Teachers

5 4%

86%

42%

69%

0%

10 0%

90-100% Non-White 90-100% W hite

Cert ified in F ield BA o r B S in F ield

Source: Jeannie Oakes, Multiplying Inequalities: The Effects of Race, Social Class, and Tracking on Opportunities to Learn Mathematics and Science (Rand, 1990).

Education Trust 27

College Graduates by Age 26

Young People From High-Income Families

75%

Young People From Low-Income Families

8%

Source: Tom Mortenson, Post Secondary Opportunity, 2004.

The Workforce Alliance 28

Pell Grants National Statistics

The maximum Pell Grant is currently only $4,050Pell can not effectively be used for most part time students. Many low-income working adults discover that they can benefit very little or not at all from Pell, due to an eligibility formula that calculates the Cost of Attendance differently for students attending half-time or more versus those attending less than half-time. Less than half-time students can count only a limited range of expenses - tuition, fees, books and supplies, dependent care expenses and transportation - towards their costs of attending school.Remember 62% of part time CC students work full timeSince 1980, the Pell Program appropriations have been insufficient to meet the needs of all eligible students.

Economic Policy Institute 29

Health & Pension Coverage for Recent High School Graduates Declining

1979 2002 Change Health Coverage 63.3% 34.7% -45.2% Pension 36% 20% -44.4%

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Major Drivers of Change in the Economy

Global Competition in the new 24/7 World

Rohit Talwar, Fast Future, 4/06 31

Rohit Talwar, CEO Fast Future April '06

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Malcolm Frank, Cognizant Corp. 33

Malcolm Frank, Cognizant 34

Education Trust 35

College Graduates Last Year

China 2.5 million

India 2.3 million

US 1.3 million

Malcolm Frank, Cognizant 36

Greystone Group 37

Knock, knock: Anybody home ?Four Year College Graduates

1999 2005

USA 1.3 Mil 1.3 Mil

China 950,000 2.5 Mil

Education Trust 38

College Completion Over Time

29%19%United Kingdom

36%16%Spain

45%30%Canada

48%20%Ireland

39%30%United States

20011970

Education Trust 39

Education Attainment: Then and Now

1970s 2003

Tertiary Completion* #1 #7

Source: Organization for Economic Cooperation and Development (OECD), Education at a Glance (September 2005).

Education Trust 40

55% of our 15-year-olds at problem-solving level 1 or below.

Closest other country?LATVIA

Education Trust 41

U.S. Ranks Low in the Percent of Students in the Highest Achievement Level (Level 6)

in Math

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2

4

6

8

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Aust

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Can

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Swed

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Aver

age

Aust

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Fran

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Rep

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Sta

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Italy

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cent

of

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Source: Organization for Economic Cooperation and Development (OECD), PISA 2003 Results, data available at http://www.oecd.org/. PISA is the Program for International Student Assessment.

Education Trust 42

U.S. Ranks 23rd out of 29 OECD Countries in the Math Achievement of the Highest-

Performing Students*

300

350

400

450

500

550

600

650

700

Belg

ium

Japa

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Switz

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zech

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* Students at the 95th PercentileSource: Organization for Economic Cooperation and Development (OECD), PISA 2003 Results, data available at http://www.oecd.org/. PISA is the Program for International Student Assessment.

Education Trust 43

2003 PISA Problem-Solving Results: US #23

Source: Organization for Economic Cooperation and Development, PISA. Problem Solving for Today’s World, 2004. PISA is the Program for International Student Assessment.

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Major Drivers of Change in the Economy

Immigration

Ctr for Labor Mkt Studies/ Northeastern U.

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Where Does Immigration Fit in this Debate

Immigration is a gigantic factor in the US workforce right nowLast 5 years 43% of all the population growth in United States is from immigrationThat rate of foreign immigration as a share of total population growth percentage is higher than ever in US history79.6% of immigrants are working, higher than overall US labor force participationHow big is this issue?– Percent of foreign born in US labor force 1980 = 7.9%– This percent in 2000 jumped to 15.8%

Percent of High school dropouts, immigrants = 36.2% of workforce, native born 11% of workforce

Ctr for Labor Mkt Studies/ Northeastern U.

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Immigration Effect on US born Youth

Soft skills an issueLabor force participation rate USA– 2000 = 64.5%– 2005 = 62.6%

– But for 16 to 19 year olds• 2000 = 46.3%• 2005 = 38.2% (Wow, a (Wow, a ––17.5% change in 5 years!)17.5% change in 5 years!)

Why: immigrant substitution; loss of unskilled jobs; increase inoff the books jobs

Note: in Philadelphia, unemployment rate for 16 – 19 year olds is the same whether foreign born or native born

Ctr for Labor Mkt Studies/ Northeastern U.

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Immigration Pop Quiz

What American City has the second largest Bosnian population anywhere outside Bosnia ?– Utica, New York– St. Louis, Missouri– Toledo, Ohio– Chicago, Illinois

Education Trust 48

Education Trust 49

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Major Drivers of Change in the Economy

Is it OffshoringOffshoring or TechnologyTechnology ?

Morgan Stanley Research 51

Fortune Magazine, May 15, 2006 52

Technology Pop Quiz

What country is #1 in mobile phone usage

#1 in cable TV subscriptions

#2 in Internet users

#4 in installed PCs

(Hint- It’s the same country)

Fortune Magazine, April 2006 53

The Dog That Didn’t Bark

Immigration “reform” in Congress has been in the news With all the press focus on immigration reform, almost no attention is being paid to immigration policies favoring high-skilled , well educated immigrants --from Fortune Magazine March 30, 2006

Since last August there have been -- with a couple of small exceptions -- no H1B visas available for skilled workers. And there won't be any new ones issued until October. "I represent a large number of multinational companies," Angelo Paparelli (an immigration lawyer with offices in New York and Irvine California) says, "and the attitude behind the scenes is,“If America won't let the H1Bs in, we'll go and create the jobs elsewhere."

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Labor Demand Will Outstrip Supply

Expected Labor Force and Labor Force Demand, 2002-2031

Source: Employment Policy Foundation analysis and projections ofCensus/BLS and BEA data.

130

140

150

160

170

180

190

200

210

2002 2006 2010 2014 2018 2022 2026 2030

Labor NeededLabor Available

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A Day in the Life

Travels with John, Summer 2005– The Airport– The Rental Car Counter– The Tool Booth– The Hotel– Kinko’s– The Train Station

The Chorus (that’s you)– “These were all jobs you could raise a family on with a high school

diploma, probably had a pension & health coverage.”

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So What Do We Train for….

If Richard Riley and Robert Reich are right, what will

you train for…..

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l “None of the top 10 jobs in 2010 exist today.”

Former Ed. Secretary Richard Riley

“Average person today will have 10-14 careers.”“Average job will last 3 – 5 years.”

Dept of Labor

Changing Jobs:

BLS 58

Mean number of jobs held between the ages of 18 and 32 (1978 to 1995) reported in 1995 by individuals ages 31 to 38 in 1995, by

level of education.SOURCE: Bureau of Labor Statistics (1998e).

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How Did Are We Reacting as a Country ?

Decreased Funding

Isabelle Sawhill, speech to NCEE, 3/04

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Yeah, but Cindi Lauper was right

Money Does Change EverythingThe Deficit, the Dollar, the War in IraqCutting the Deficit in half in 5 years, hard lessons from Belle Sawhill (Brookings Institute) :– Can you ignore the deficits?– Can you tax your way out of it?– Can you do it by cuts alone:– The 17%/ 53%/ 91% solutions

GAO 61

Workforce Funding as we confront these extraordinary challenges

According to Congress’ Government Accountability Office (GAO):

1. In 1978 we spent $9.5 Billion on job training2. Adjusted for inflation we’d have to spend $30

Billion today to stay at the same level3. Instead we are spending $3.5 Billion today4. Put another way, in this time of incredible

challenge to our national economic security, we are spending 11.7% of what we spent 28 years ago !!

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A Retrospective: Right Idea, Wrong Execution

One Stop Career CentersHope ScholarshipsLife Long Learning CreditWIA’s workforce development systemLocalized Labor Market InformationMore incumbent worker trainingPell grants, Not Your Father’s GI BillTargeted loan forgiveness in shortage areas

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After hearing the presentation, which 2 factors do you now think are most affecting today’s labor market? ( Select 2)

Baby BoomersDemographic ShiftsIncreased Education PayoffGlobal Competitor’s ActionsImmigrationOff ShoringTechnology Changes

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In a Nutshell That’s What I Know

Sometimes the biggest risk of all is staying the same………Email me for clarifications, or with any questions. I want you to be able to use this material to make more visible this silent workforce crisis.For More information contactJohn Twomey at jtwomey@nyatep.org