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THE FUTURE OF THE WORKFORCE: OUTLOOK AND CHALLENGES

Dr. Mike Walden

Reynolds Distinguished Professor

North Carolina State University

THE NATIONAL ECONOMY

GDP and Employment: back to pre-recessionary levels

Growth rates have accelerated

Confidence up

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REASONS FOR IMPROVEMENT

Rebound from initial slow growth

Housing improvement

Wealth upswing

Continued FED stimulus

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AND, THE PLUNGE IN GAS PRICES

Like a $250 billion tax cut

Doubling of US oil supply in six years

Slowing of usage growth in Asia

4

THE HOUSING MARKET

IMPROVEMENT, BUT…..

PRE-RECESSIONARY LEVELS NOT FORESEEN

WILL THE MILLENNIALS BUY?

5

INFLATION AND INTEREST RATES

INFLATION IS STILL TAME

RATES ARE EDGING UP

STILL HISTORICALLY LOW

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POLICY IN 2015: ALL EYES ON THE FEDERAL RESERVE

MORTGAGE BUYING HAS STOPPED

RAISING SHORT-TERM INTEREST RATES IS NEXT

WHEN?

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NATIONAL OUTLOOK3% GDP GROWTH

3 MILLION PAYROLL JOBS

5.0% TO 5.5% HEADLINE JOBLESS RATE

INFLATION AND INTEREST RATES STILL LOW

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NATIONAL ECONOMIC ISSUESMissing middle income jobs

Slow wage and salary gains

Technological unemployment

Rising dependency rate

Federal fiscal balance

Infrastructure improvement

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NORTH CAROLINA ECONOMY

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NC PAYROLL JOB GROWTH

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2010 2011 2012 2013 20140

20000

40000

60000

80000

100000

120000

ALTERNATIVE MEASURES OF THE NORTH CAROLINA UNEMPLOYMENT RATE 2007: HEADLINE, 4.5%; U5, 5.6%; U6, 8.5%

4,09-3,10

2,10-1,11

3,10-2,11

4,10-3,11

2,11-1,12

3,11-2,12

4,11-3,12

2,12-1,13

3,12-2,13

2,13-1/14

3,13-2,14

4,13-3,14

5

7

9

11

13

15

17

headline U5 U6

%

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MIDDLE-INCOME JOBS HAVE BEEN THE SLOWEST GROWING DURING THE RECOVERY

13

Leisure/Hosp.

Other Serv.

Trd/Tranp/Util

Educ/Hlth Care

Construction

Gov't

Manufacturing

Prof/Bus Serv

Information

Financial Serv

TOTAL

-5 0 5 10 15 20 25 30 35

USNC

%

GEOGRAPHIC ECONOMIC INEQUALITY ALSO CONTINUES IN NORTH CAROLINA

Raleigh/Cary 15.8% Charlotte 14.1%

Asheville 10.4% North Carolina 9.5% Durham-CH 8.6% Wilmington 8.2% Burlington 7.9% Greenville 6.3% Greensboro-HP 5.7% Winston-Salem 5.4% Jacksonsville 4.6% Hickory 3.2% Goldsboro 2.1% Fayetteville 0.6%

Rocky Mount -2.0%

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70

75

80

85

90

95

100

105

NCSU INDEX OF NORTH CAROLINA LEADING ECONOMIC INDICATORS

Source: calculations by Dr. Michael Walden

NORTH CAROLINA OUTLOOK

CONTINUED GROWTH

125,000 PAYROLL JOBS

5.0% TO 5.5% HEADLINE JOBLESS RATE

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RALEIGH-CARY METRO OUTLOOK

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ONE OF THE MOST DYNAMIC, FAST- GROWING REGIONS IN THE COUNTRY

IN TOP TEN OF LEADING TECH CENTERS

#2 IN TECH JOBS ADDED 2001-13

A TECHNOLOGY-EDUCATIONAL COMPLEX

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RECENT GROWTH

20,000 PAYROLL JOBS ADDED IN 2014

HEADLINE JOBLESS RATE IN 4% RANGE

EXISTING HOME SALES UP 3%

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KEY 2015 PROJECTIONS

25,000 PAYROLL JOBS

4.0% TO 4.5% HEADLINE JOBLESS RATE

HOUSING SALES UP 15%

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LONG-RUN: A “RACEHORSE” REGION

WAKE COUNTY WILL DOUBLE IN POPULATION BY 2050

TREMENDOUS IMPACT OF CHATHAM PARK

CONGESTION, MOBILITY, AND COST CHALLENGES

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COUNTY GROWTH RATES, 2010 - 2050

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AVERY

BURKE

CHOWAN

CLEVELAND

GUILFORD

MARTIN

ALAMANCE

ALEXANDER

ALLEGHANY

ANSON

ASHE

BEAUFORT

BERTIE

BLADEN

BRUNSWICK

BUNCOMBE

CABARRUS

CALDWELL

CAMDEN

CARTERET

CASWELL

CATAWBACHATHAM

CHEROKEECLAY

COLUMBUS

CRAVEN

CUMBERLAND

CURRITUCK

DAREDAVIDSON

DAVIE

DUPLIN

DURHAM

EDGECOMBE

FORSYTHFRANKLIN

GASTON

GATES

GRAHAM

GRANVILLE

GREENE

HALIFAX

HARNETT

HAYWOOD

HENDERSON

HERTFORD

HOKE

HYDE

IREDELL

JACKSON

JOHNSTON

JONES

LEE

LENOIR

LINCOLN

MCDOWELL

MACON

MADISON

MECKLENBURG

MITCHELL

MONTGOMERYMOORE

NASH

NEWHANOVER

NORTHAMPTON

ONSLOW

ORANGE

PAMLICO

PASQUOTANK

PENDER

PERQUIMANS

PERSON

PITT

POLK

RANDOLPH

RICHMOND

ROBESON

ROCKINGHAM

ROWAN

RUTHERFORD

SAMPSON

SCOTLAND

STANLY

STOKESSURRY

SWAIN

TRANSYLVANIA

TYRRELL

UNION

VANCE

WAKE

WARREN

WASHINGTON

WATAUGA

WAYNE

WILKES

WILSON

YADKIN

YANCEY

70% or above growth

35% to 69% growth

0% to 34% growth

population loss

WORKFORCE ISSUES

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CHANGING SHARES OF NC JOBS

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1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 20120

10

20

30

40

50

60

farming manufacturing services

% o

f to

tal em

plo

ym

ent

GAINS IN NC AND US EDUCATIONAL ATTAINMENT (% POINT CHANGE FOR ADULTS OVER 25 YEARS OF AGE)

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HS or more Bach or more Adv or more0

1

2

3

4

5

6

7

8

NC US

Perc

enta

ge p

oin

t

DISTRIBUTION OF EMPLOYMENT BY TASK CLASSIFICATION

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Analytical/mgmt Routine-cog/manual Non-routine-manual0

10

20

30

40

50

60

70

80

NC-1980 NC-2010 US-1980 US-2010

%

TECHNOLOGICAL UNEMPLOYMENT

OCCUPATIONS THAT COULD DISAPPEAR BY 2050:

SECURITY GUARDSDISHWASHERSFAST FOOD WORKERSRECEPTIONISTSCASHIERSLOAN OFFICERSWAITERSRETAIL SALESPERSONS

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POTENTIAL NEW OCCUPATIONS INHOUSEHOLD MANAGEMENT

REPAIR AND MAINTENANCE OF TECH. EQUIPMENT

GLOBAL INTERACTION

DATA MANAGEMENT AND ANALYSIS

INTERNATIONAL TOURISM

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IMPLICATIONS

HALF OF OCCUPATIONS WILL LOSE JOBS DUE TO TECHNOLOGICAL ADVANCES

NEED A “RAPID RESPONSE EDUCATION SYSTEM”

* FAST TRAINING * MONITORING TRENDS * ACCESSIBLE TO ADULTS CHANGING CAREERS

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