Presentation on theme: "John Hawkins, Senior Consultant Boeing’s Departure from Long Beach… Now What?"— Presentation transcript:
John Hawkins, Senior Consultant email@example.com Boeing’s Departure from Long Beach… Now What?
When a major employer decides to pack up and leave… How will that impact the local economy? Which industries and occupations will suffer? What will that do to the education pipeline? Where will all the displaced workers go? What steps can you take to help prevent this from happening in the first place?
Examining the Impact of Boeing’s Long Beach Plant Closure and How Workforce Practitioners Can Respond Using Data
Who is EMSI? ( Economic Modeling Specialists, Intl.) Founded in 2000 by two economists / professors from the University of Idaho Economic and fiscal impact studies Regional economic models, unparalleled LMI
Boeing’s Long Beach Location Southwest L.A. County
A Long (Beach) History The 1.1-million sq. ft. plant has been a fixture of the Long Beach economy since 1941 (7+ decades) Douglas Aircraft Company (later McDonnell Douglas) supplied the US Air Force with aircraft during World War II McDonnell Douglas & Boeing merged in 1997 and began producing the C-17 Globemaster III
Impact to the Local Economy (using an Input/Output Model) Boeing’s C-17 plant closure is expected to yield 1,410 displaced jobs - many are hourly positions for aircraft mechanics, engineering techs, and misc. production workers For every laid-off worker, 2.68 jobs in other industries will also disappear (job multiplier of 3.68) Equates to a loss of 3,781 more jobs for a total regional job loss of 5,191 (3,781 + 1,410)
The average earnings for each job lost is $80,435 (average earnings for the region are at $63,700) Regional earnings will be reduced by $417 million ($190 million just from the 1,410 layoffs) Aside from manufacturing, most job losses will occur in service industries Impact to the Local Economy (using an Input/Output Model)
Note for the Local Economy Boeing will be moving 1,000 customer support jobs from Washington state to Long Beach These support positions include aerospace engineers and other high-skilled workers It is likely that some of the workers laid off from the C-17 plant will have job opportunities in customer support
Impact to Regional Higher Education (using a Gap Analysis) Losing a major employer impacts educators and students – Long Beach area community colleges and other institutions that offer technical training geared toward aviation occupations – Students nearing completion of current training will have to compete with laid-off workers
Impact to Regional Higher Education (using a Gap Analysis) Of the 6 institutions contributing completers for these two programs, Crimson Technical College in Inglewood, CA graduated more than half (244) in 2013 Crimson is solely an aviation education provider – its only graduates in 2013 (per IPEDS) were in these two maintenance programs
Impact to Regional Higher Education (using a Gap Analysis) Regional institutions training Aerospace Engineers include USC, UCLA, Long Beach State, and the California Institute of Technology The existing undersupply of Aerospace Engineers could also help newly laid-off engineers find new opportunities quickly
Helping Displaced Workers Transition (using a Compatible Occupations) 49% of the estimated job losses from the C-17 plant closure will be among men and women 45 years of age or older If these workers aren’t rehired by Boeing for customer service roles or don’t quickly find other jobs in their field, they will be facing late-career transitions
Helping Displaced Workers Transition (using a Compatible Occupations) Finding career opportunities that make sense based on their knowledge and skills greatly helps this transition process Using a Compatibility Index (based on O*NET codes) we’ve put together a few examples
Career Transition: Aircraft Assembler (51-2011) to Auto Body Repairer (49-3021) Compatibility score = 96/100 (96%)
Career Transition: Aircraft Assembler (51-2011) to Auto Body Repairer (49-3021)
More Compatible Occupations for Aircraft Assemblers Rail Car Repairers (96% compatible) Machinists (96% compatible) Solar Photovoltaic Installers (95% compatible) Mechanical Door Repairers (95% compatible) All have a median wage at or above Aircraft Assemblers and anticipate growth over the next 5 years
Career Transition: Aircraft Mechanic (49-3011) to Industrial Machinery Mechanic (49-9041) Compatibility score = 94/100 (94%)
Career Transition: Aircraft Mechanic (49-3011) to Industrial Machinery Mechanic (49-9041)
More Compatible Occupations for Aircraft Mechanics Mobile Heavy Equipment Mechanics, Except Engines (96% compatible) Gas Plant Operators (94% compatible) Manufacturing Production Technicians (94% compatible) Electrical and Electronics Repairers, Powerhouse, Substation, and Relay(95% compatible) All have a median wage at or above Aircraft Assemblers and anticipate growth over the next 5 years
Steps to Prevent Closures or Relocations It is good to be prepared to take action after and employer closes it doors – but taking steps beforehand to help prevent a key employer from closing or relocating has many benefits – Better use of scarce local resources (funds) – Less economic lag time in the region – High business retention = better business attraction
Step 1: Understanding Your Industries This is where Target Industry or Sector Strategy analysis can be very valuable Key data metrics for detailed industries (6-digit NAICS) help to unpack the true regional drivers – Growth trends – Concentration (location quotient) – Import/Export analysis (finding base industries)
Step 2: Discover Which Industries are Underperforming Some target/driving industries might be large, highly concentrated, and growing – but are they performing to their full potential? Underperforming industries are a flight risk for your region so it is vital to identify them, work with them, and keep tabs on how they do over time This practice can be initiated using Shift-Share Analysis
Shift-Share Analysis Unpacks local job growth into component parts a.Local growth due to national growth in the same industry (industry mix effect) b.Local growth due to overall growth of the national economy (national growth effect) c.Local growth due to regional competitive advantage (regional competitiveness effect)
Step 3: Communicating Impacts It is critical that local workforce and economic development practitioners communicate with key decision-makers and policymakers to ensure they understand the potential ripple effects of their actions (or the lack there of) – Will that policy or law impact how your key employer conducts business? – Would a small incentive outweigh the potential cost of your key employer leaving?
A Few Case Studies The Portage County Business Council in Wisconsin used EMSI’s economic impact figures to help convince legislators that the damage of losing Skyward, Inc., a local software company, would be too great. The result: Skyward stayed and is expanding in the region The Fond du Lac Economic Development Corporation, also in Winconsin, used EMSI economic impact numbers to convince city, county, and state officials to make a more aggressive bid to keep Mercury Marine, a prominent outboard boat motor producer. The company stayed in Fond du Lac thanks to the concerted business retention effort The East Kentucky Concentrated Employment Program (EKCEP) used EMSI data to help win a DOL grant and assist hundreds of laid-off coal mine workers with workforce transition assistance.
John Hawkins Senior Consultant firstname.lastname@example.org