Trends In Labor Force Supply And Demand Wisconsin Family Impact - - PowerPoint PPT Presentation

▶
trends in labor force supply and demand
SMART_READER_LITE
LIVE PREVIEW

Trends In Labor Force Supply And Demand Wisconsin Family Impact - - PowerPoint PPT Presentation

Aug 26, 2022 153 likes •433 views

Trends In Labor Force Supply And Demand Wisconsin Family Impact Seminar Madison, WI November 4, 2015 Daniel Sullivan Executive Vice President and Director of Research Federal Reserve Bank of Chicago 0 0 0 Main Points Demographics and

slide-1
SLIDE 1

Trends In Labor Force Supply And Demand

Wisconsin Family Impact Seminar Madison, WI November 4, 2015 Daniel Sullivan Executive Vice President and Director of Research Federal Reserve Bank of Chicago

slide-2
SLIDE 2

1

Main Points

 Demographics and other long-running trends imply that the U.S.

labor force will grow more slowly in the years ahead – Slower growth in labor supply may pose a challenge for employers – The future labor force will also be older and better educated

 Standard industrial and occupational projections foresee a

continuation of past trends – E.g., a declining share of employment in manufacturing

 Such projections are highly uncertain

– It is always difficult to anticipate key trends – Industry workforces are aging at different rates with implications for future job openings

 Hard and soft skills likely to be of increasing importance

– Returns to academic and vocational skills remain high – Technology and international competition are eroding employment

  • pportunities for workers doing many routine tasks
slide-3
SLIDE 3

2 62 64 66 68 1986 '91 '96 '01 '06 '11 '16

Labor Force Participation Rate is Falling

Ages 16+

(percent) Participation Rate Long Run LFP Trend Unemployment Based Prediction

slide-4
SLIDE 4

3 3 3

  • 1.0

0.0 1.0 2.0 1990-2000 2000-2014 2014-2020*

Labor Force Growth Has Slowed

Labor Force Growth

(percent) ■ U.S. ■ Ages 16-24 * Chicago Fed staff projections

slide-5
SLIDE 5

4 4 4 5 10 15 20 25 30 1982 '86 '90 '94 '98 '02 '06 '10 '14 '18

Labor Force Share by Age

Labor Force Share

(percent) Ages 16-19 Ages 20-24 Ages 55 and up Projections prepared by Chicago Fed staff

slide-6
SLIDE 6

5 5 5 10 20 30 40 50 1992 '96 '00 '04 '08 '12 '16 '20

Labor Force Share by Education

Labor Force Share – Ages 25 and Older

(percent) HS Dropout HS Degree Some College College Degree Projections prepared by Chicago Fed staff

slide-7
SLIDE 7

6 6 6 25 30 35 40 45 70 75 80 85 90 1993 '98 '03 '08 '13

School Attendance Has Been Rising

Share of Population in School

(percent) Ages 16-19 Ages 20-24 Source: Bureau of Labor Statistics based on October Current Population Survey Data

slide-8
SLIDE 8

7 7 7 5 10 15 1978 '83 '88 '93 '98 '03 '08 '13

Education Is A Good Investment On Average

Internal Rate of Return to Higher Education

(percent) ■ 4 Year College Graduate v. HS Graduate ■ 2 Year College Graduate v. HS Graduate Source: Lisa Barrow and Ofer Malamud, Chicago Fed and University of Chicago.

slide-9
SLIDE 9

8 8 8

Returns To Vocational Education Also Attractive

 E.g., Jacobson, LaLonde and Sullivan (2005): Old dogs can learn new tricks

– Retraining displaced workers can increase their earnings potential – Effects per credit comparable to degree programs – Returns vary by type of course – e.g., higher for health professions and

  • ther technical subjects

– Returns better for workers with stronger high school backgrounds and/or some previous college experience

 Usually a better investment for relatively young workers

– A longer period to recoup the investment

slide-10
SLIDE 10

9 9 9

Helping Disadvantaged Youth More Difficult

 Historically, there have been many disappointments

– Interventions are often too small to have a chance of offsetting disadvantages – Rigorous estimates of program impact are often indistinguishable from zero

 Recently, some more hopeful outcomes

– E.g., career academies – Professors Barnow and Lerman will discuss additional successful approaches

slide-11
SLIDE 11

10

Industry and Occupation Employment Projections

 From the Bureau of Labor Statistics

– At state-industry and state-occupation level through 2022 – Not an easy task – expect surprises

 Industries that are expected to grow fastest in both the U.S. and

Wisconsin: construction, education and health, and business and professional services – Industries that are projected to grow faster in Wisconsin than the U.S. are: manufacturing and natural resources

 Occupations that are expected to grow fastest in the U.S: healthcare,

personal care, construction, computer and math, community and social services, business and finance, and building maintenance – Occupations that are projected to grow faster in Wisconsin than the U.S. are: legal, production, and management

slide-12
SLIDE 12

11 11 11 5 15 25 35 1960 '66 '72 '78 '84 '90 '96 '02 '08 '14

Share of Employment in Manufacturing

(percent) U.S. Wisconsin

Has The Share in Manufacturing Stabilized?

Source: Current Employment Statistics Survey, Bureau of Labor Statistics accessed via Haver Analytics.

slide-13
SLIDE 13

12 12 12 15 20 25 30 35 1977 '82 '87 '92 '97 '02 '07 '12

Manufacturing Workforce Older

Share of Workers over 50

(percent) Manufacturing Non-manufacturing Source: Chicago Fed Staff tabulations of Current Population Survey Data

slide-14
SLIDE 14

13 13 13 1 2 3 Low Wage Mid Wage High Wage

Job Growth Slow in Middle-Wage Occupations

Annualized Job Growth of Occupations Ranked by Wage Rate

(percent) ■ Since 1990 ■ Since June 2009 Source: Bureau of Labor Statistics, Current Population Survey

slide-15
SLIDE 15

14 14 14 14 16 18 20 1999 '04 '09 '14 26 28 30 32 1999 '04 '09 '14

Routine Jobs Are Declining

Cognitively Routine Jobs

(percent of total US employment)

Manually Routine Jobs

(percent of total US employment) Source: From Bureau of Labor Statistics Occupational Employment Survey data, computed by Dan Aaronson and Brian Phelan, Chicago Fed and DePaul.

slide-16
SLIDE 16

15

High Demand Jobs Require Math And Social Skills

Source: “Why What You Learned in Preschool is Crucial at Work.” New York Times, October 17, 2015 on David Deming. http://www.nytimes.com/2015/10/18/upshot/how-the-modern-workplace-has-become-more-like-preschool.html?_r=1

slide-17
SLIDE 17

16

Summary

 The future workforce will

– Grow more slowly – Be older and better educated

 Particular industrial and occupational growth rates will likely extend

previous trends – But there is a lot of uncertainty

 A firmer expectation is that skills – both technical and social – will

continue to be in high demand – Occupations that can be automated or outsourced to lower-wage countries will likely shrink – Highly routine jobs with little need for social interaction will be most vulnerable

slide-18
SLIDE 18

17 17 17

Appendix

slide-19
SLIDE 19

18 18 18

2013 Labor Force Participation Rates (percent, left axis) Men Women

Participation And Population Change By Age

Change in Population Share (percentage points, right axis) 1995-2000 2010-2015

  • 1.50%
  • 1.50%

0.75% 0.00% 0.75%

Age

10 20 30 40 50 60 70 80 90 100 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80

slide-20
SLIDE 20

19 19 19 30 40 50 60 70 1977 '82 '87 '92 '97 '02 '07 '12

Teen LFP Has Fallen Massively

Ages 16-19

(percent) ■ Men ■ Women

slide-21
SLIDE 21

20 20 20 60 70 80 90 1977 '82 '87 '92 '97 '02 '07 '12

Early 20s LFP Also Down A Good Deal

Ages 20-24

(percent) ■ Men ■ Women

slide-22
SLIDE 22

21 21 21 80 85 90 95 100 1977 '82 '87 '92 '97 '02 '07 '12

Prime Age Male LFP Steadily Down

Men, 25-54

(percent) ■ 25-29 ■ 40-44 ■ 30-34 ■ 45-49 ■ 35-39 ■ 50-55

slide-23
SLIDE 23

22 22 22 50 60 70 80 1977 '82 '87 '92 '97 '02 '07 '12

Prime Age Female LFP Now Slowly Down

Women, 25-54

(percent) ■ 25-29 ■ 40-44 ■ 30-34 ■ 45-49 ■ 35-39 ■ 50-55

slide-24
SLIDE 24

23 23 23 62 64 66 68 1995 2000 2005 2010 2015

Comparison to BLS Projections

Model data and projections

LFP Data from Model Model 2002 Projection Model 2004 Projection Model 2006 Projection 62 64 66 68 1995 2000 2005 2010 2015

BLS data and projections

LFP Data from BLS BLS 2002 Projection BLS 2004 Projection BLS 2006 Projection

slide-25
SLIDE 25

24 24 24

Industry Employment Projections to 2022

% Difference in wages* U.S. Employment % Change WI 2012 WI Change WI % Change

Total

10.7 3,051,328 217,845 7.1

Goods

17.5 6.5 653,231 24,583 3.8

Natural Resources

16.3

  • 10.6

106,414

  • 1,694
  • 1.6

Construction

7.3 28.7 93,197 17,113 18.4

Manufacturing

22.8

  • 4.6

453,620 9,164 2.0

Service

  • 3.7

12.2 2,244,265 185,817 8.3

Trade, Transportation, ddd& Utilities

  • 16.1

7.2 525,447 22,801 4.3

Information

77.2

  • 2.4

46,313 565 1.2

Financial

66.3 9.6 162,632 15,922 9.8

Professional & fffflBusiness Services

30.0 19.4 289,552 42,089 14.5

Education & Health

  • 10.3

27.9 637,625 70,748 11.1

Leisure

  • 59.0

9.3 255,858 70,748 9.2

Other Services

  • 33.8

10.5 146,986 7,362 5.0

Government

N/A 2.3 179,852 2,688 1.5

* Percent difference in Industry Average Weekly Wage (2014) vs U.S. Average Weekly Wage for all Industries

slide-26
SLIDE 26

25 25 25

Occupation Employment Projections to 2022

% Difference in wages* U.S. Employment % Change WI 2012 WI Change WI % Change

Total

10.7 3,051,328 217,845 7.1

Management

138.2 7.2 144,717 12,130 8.4

Business & Finance

53.3 12.5 146,675 12,518 8.5

Computer & Math

77.8 18.0 65,526 7,648 11.7

Architecture & Engineering

72.6 7.3 49,017 2,093 4.3

Life, Physical, and Social Sciences

48.4 10.1 24,271 2,019 8.3

Community and Social Services

  • 4.1

17.2 35,929 2,377 6.6

Legal

114.1 10.7 15,176 2,447 16.1

Education

10.5 11.1 182,223 11,074 6.1

Arts, Design, Media, Sports

18.1 7.0 49,980 3,722 7.5

* Percent difference in 2014 Annual Mean Wage for Individual Occupations vs U.S. Mean Wage for All Occupations

slide-27
SLIDE 27

26 26 26

Occupation Employment Projections to 2022

% Difference in wages* U.S. Employment % Change WI 2012 WI Change WI % Change

Healthcare

60.9 21.5 161,312 23,792 14.8

Healthcare support

  • 39.0

28.1 82,784 10,984 13.3

Protective Services

  • 6.9

7.9 54,884 2,499 4.6

Food prep

  • 53.5

9.4 232,533 18,298 7.9

Building maintenance

  • 44.2

12.5 102,621 12,852 12.5

Personal care

  • 47.1

20.9 150,668 19,305 12.8

Sales

  • 18.1

7.3 281,322 11,699 4.2

Office support

  • 25.3

6.8 444,947 20,468 4.6

Farming

  • 46.7
  • 3.4

84,896

  • 3,552
  • 4.2

Construction

  • 1.3

21.4 97,504 14,648 15.0

Install, repair

  • 4.3

9.6 108,958 7,703 7.1

Production

  • 24.9

0.8 314,215 9,924 3.2

Transport

  • 27.0

8.6 221,171 13,197 6.0

* Percent difference in WI 2014 Annual Mean Wage vs U.S. Mean Wage for all Occupations