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1 Six Mega Trends That Are Jolting the U. S. Labor Market John Twomey A Webinar Presented by the Workforce Development Network and NYATEP.

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Presentation on theme: "1 Six Mega Trends That Are Jolting the U. S. Labor Market John Twomey A Webinar Presented by the Workforce Development Network and NYATEP."— Presentation transcript:

1 1 Six Mega Trends That Are Jolting the U. S. Labor Market John Twomey A Webinar Presented by the Workforce Development Network and NYATEP

2 2 What Well Talk About Today We all know something very different is going on in the economy, lets take a look at the major underlying factors ? My hope is that you will find this information something you can use to explain todays U. S. labor market to elected officials, Workforce Investment Boards, school boards, parents and students.

3 3 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. –Kati Haycock, the Director of the Education Trust is one of the leading child advocates in the field of education. –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. Any crazy conclusions are mine, not the result of their work.

4 4 Because something is happening here But 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

5 5 Which 2 factors do you think are most affecting todays labor market? ( Select 2) Baby Boomers Demographic Shifts Increased Education Payoff Global Competitors Actions Immigration Off Shoring Technology Changes

6 6 Well take a look at Now that We Know Whats 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…

7 7 Setting the Stage –What business are you in- the Iceman Cometh (and Go-eth)

8 8 Major Drivers of Change in the Economy Baby Boomer Retirements

9 9 Source: Bureau of Labor Statistics Civilian Labor Force by Generation National Statistics

10 10 Major Drivers of Change in the Economy Shifting Demographics

11 Bureau of the Census11 200320102050 White:73%65%53% (Non-Hispanic) Hispanic: 11%16%24% Black:12%13%14% Asians: 5%7.3%11% Workforce Diversity: National Statistics

12 Rohit Talwar, at CWA 4/0612

13 13 Major Drivers of Change in the Economy Hugely Increased Payoff on Educational Attainment

14 14 Employment Change by Education: 1992-2002 National Statistics Employment Policy Foundation tabulation of BLS Statistics

15 Harris Interactive Polling15

16 16 Education Post-High School Matters National Statistics 75% of new job growth requires some level of post- high school training 1980 – 2000 19% growth in workers with post-high school education 2000 – 2020 4% growth in workers with post-high school education

17 17

18 Education Trust18

19 Education Trust19

20 Education Trust20

21 Education Trust21

22 Education Trust22

23 Education Trust23 An Example of How State Data Looks: California

24 Education Trust24

25 Education Trust25

26 Education Trust26

27 Education Trust27

28 The Workforce Alliance28 Pell Grants National Statistics The maximum Pell Grant is currently only $4,310 Pell 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 time Since 1980, the Pell Program appropriations have been insufficient to meet the needs of all eligible students.

29 Economic Policy Institute29 Health & Pension Coverage for Recent High School Graduates Declining

30 30 Major Drivers of Change in the Economy Global Competition in the new 24/7 World

31 Rohit Talwar, Fast Future, 4/0631

32 Rohit Talwar, CEO Fast Future April '06 32

33 Malcolm Frank, Cognizant Corp.33

34 Malcolm Frank, Cognizant34

35 Education Trust35

36 Malcolm Frank, Cognizant36

37 Greystone Group37 Knock, knock: Anybody home ? Four Year College Graduates 19992005 USA 1.3 Mil China 950,0002.5 Mil

38 Education Trust38

39 Education Trust39

40 Education Trust40

41 Education Trust41

42 Education Trust42

43 Education Trust43

44 44 Major Drivers of Change in the Economy Immigration

45 Ctr for Labor Mkt Studies/ Northeastern U. 45 Where Does Immigration Fit in this Debate Immigration is a gigantic factor in the US workforce right now Last 5 years 43% of all the population growth in United States is from immigration That rate of foreign immigration as a share of total population growth percentage is higher than ever in US history 79.6% of immigrants are working, higher than overall US labor force participation How 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

46 Ctr for Labor Mkt Studies/ Northeastern U. 46 Immigration Effect on US born Youth Soft skills an issue Labor force participation rate USA –2000 = 64.5% –2005 = 62.6% –But for 16 to 19 year olds 2000 = 46.3% (Wow, a –17.5% change in 5 years!)2005 = 38.2%(Wow, a –17.5% change in 5 years!) Why: immigrant substitution; loss of unskilled jobs; increase in off the books jobs Note: in Philadelphia, unemployment rate for 16 – 19 year olds is the same whether foreign born or native born

47 Ctr for Labor Mkt Studies/ Northeastern U. 47 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

48 Education Trust48

49 Education Trust49

50 Morgan Stanley Research50

51 Fortune Magazine, May 15, 200651 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- Its the same country)

52 Fortune Magazine, April 200652 The Dog That Didnt 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."

53 53 Major Drivers of Change in the Economy Offshoring Technology Is it Offshoring or Technology ?

54 54 Labor Demand Will Outstrip Supply Expected Labor Force and Labor Force Demand, 2002-2031 Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data.

55 55 A Day in the Life Travels with John, Summer 2005 –The Airport –The Rental Car Counter –The Tool Booth –The Hotel –Kinkos –The Train Station The Chorus (thats you) –These were all jobs you could raise a family on with a high school diploma, probably had a pension & health coverage.

56 56 So What Do We Train for…. If Richard Riley and Robert Reich are right, what will you train for…..

57 57 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:

58 BLS58 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).

59 59 How Did Are We Reacting as a Country ? Decreased Funding

60 Isabelle Sawhill, speech to NCEE, 3/04 60 Yeah, but Cindi Lauper was right Money Does Change Everything The Deficit, the Dollar, the War in Iraq Cutting 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

61 GAO61 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 training 2.Adjusted for inflation wed have to spend $30 Billion today to stay at the same level 3.Instead we are spending $3.5 Billion today 4.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 !!

62 62 A Retrospective: Right Idea, Wrong Execution One Stop Career Centers Hope Scholarships Life Long Learning Credit WIAs workforce development system Localized Labor Market Information More incumbent worker training Pell grants, Not Your Fathers GI Bill Targeted loan forgiveness in shortage areas

63 63 In a Nutshell Thats 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 contact John Twomey at

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