Workforce conditions & growth forecast issues Presented to the Consensus Economic Forecasting...
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Workforce conditions & growth forecast issues Presented to the Consensus Economic Forecasting Commission October 25, 2013 Glenn Mills Chief Economist Center for Workforce Research Maine Dept. of Labor [email protected] 207-621-5192
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Transcript of Workforce conditions & growth forecast issues Presented to the Consensus Economic Forecasting...
Workforce conditions & growth forecast issues
Presented to theConsensus Economic Forecasting Commission
October 25, 2013
Glenn MillsChief Economist
Center for Workforce ResearchMaine Dept. of Labor
[email protected] 207-621-5192
Labor force & unemployment
The unemployment rate gap with the nationhas closed over the last three years…
Jan
08
Ap
rJu
lO
ctJa
n 0
9A
pr
Jul
Oct
Jan
10
Ap
rJu
lO
ctJa
n 1
1A
pr
Jul
Oct
Jan
12
Ap
rJu
lO
ctJa
n 1
3A
pr
Jul4%
5%
6%
7%
8%
9%
10%
U.S. Maine
Un
em
plo
yme
nt
Ra
tes
(Se
aso
na
lly-A
d-
just
ed
)
…Though the U.S. share of employed population remains flat while it’s been rising in Maine. The national
unemployment rate is down entirely due to lower labor force participation.
Jan
08
Ap
rJu
lO
ctJa
n 0
9A
pr
Jul
Oct
Jan
10
Ap
rJu
lO
ctJa
n 1
1A
pr
Jul
Oct
Jan
12
Ap
rJu
lO
ctJa
n 1
3A
pr
Jul58%
59%
60%
61%
62%
63%U.S. Maine
Em
plo
yme
nt
to P
op
ula
tion
Ra
tio(S
ea
son
ally
-ad
just
ed
)
Jobs & Wages
The gradual upward job trend continues…
Jan
08
Ap
rJu
lO
ctJa
n 0
9A
pr
Jul
Oct
Jan
10
Ap
rJu
lO
ctJa
n 1
1A
pr
Jul
Oct
Jan
12
Ap
rJu
lO
ctJa
n 1
3A
pr
Jul590,000
595,000
600,000
605,000
610,000
615,000
620,000
625,000
Benchmarked Job CountEstimates (to be revised March 2014)
No
nfa
rm P
ayr
oll
Job
s(S
ea
son
ally
-ad
just
ed
)
…government declines continue topartially offset private growth
Jan
08M
ayS
epJa
n 09
May
Sep
Jan
10M
ayS
epJa
n 11
May
Sep
Jan
12M
ayS
epJa
n 13
May
485,000
495,000
505,000
515,000
525,000
99,000
101,000
103,000
105,000
107,000
Private Job CountPrivate Estimates (to be revised March 2014)Government Job CountGovernment Estimates (to be revised March 2014)
Priv
ate
Jobs
Gov
ernm
ent J
obs
Jobs in labor-intensive sectors involved in making, moving, or selling products are way down. Gains have primarily been in human capital
intensive sectors. Many displaced workers do not have the education or experience to qualify for jobs in growing sectors. This
mismatch between job seeker qualifications and needs of hiring employers is an impediment that should be considered when
forecasting job growth. (Change in jobs, Dec 2007 to present)
Man
ufac
turin
g
Cons
truc
tion
Reta
il Tr
ade
Gov
ernm
ent
Info
rmati
on
Tran
spor
tion
& U
tiliti
es
Who
lesa
le T
rade
Fina
ncia
l Acti
vitie
s
Oth
er S
vcs
Nat
ural
Res
ourc
es
Educ
ation
Hea
lthca
re/S
ocia
l Ass
ista
nce
Leis
ure
& H
ospi
talit
y
Prof
essi
onal
&Bu
sine
ss S
vcs-9,000
-5,100 -5,000 -3,900-2,600 -1,700 -1,200 -800 -100
01,500
3,400 4,000 4,800
Total wages paid remain relatively flat(adjusted for inflation)
20
00
.12
00
0.3
20
01
.12
00
1.3
20
02
.12
00
2.3
20
03
.12
00
3.3
20
04
.12
00
4.3
20
05
.12
00
5.3
20
06
.12
00
6.3
20
07
.12
00
7.3
20
08
.12
00
8.3
20
09
.12
00
9.3
20
10
.12
01
0.3
20
11
.12
01
1.3
20
12
.12
01
2.3
20
13
.1
560,000
580,000
600,000
620,000
$4.75
$5.25
$5.75
$6.25
Jobs (left scale)Total Wages (right scale)
Wag
e &
Sal
ary
Jobs
Tot
al W
ages
(in
Bill
ions
of
2011
Q1
$)
Moody’s and Global Insight
forecasts
CEFC forecasts in 2010 and early 2011 expected a return to pre-recession job levels by 2013 or 2014…
Jan
00
Oct Ju
lA
pr
Jan
03
Oct Ju
lA
pr
Jan
06
Oct Ju
lA
pr
Jan
09
Oct Ju
lA
pr
Jan
12
Oct Ju
lA
pr
Jan
15
Oct Ju
lA
pr580,000
590,000
600,000
610,000
620,000
630,000
Payroll Jobs Feb-10 Nov-10 Apr-11
…Forecasts have become more moderate over time, the latest expecting a return to pre-recession job levels by 2017
Jan
00
Oct Ju
lA
pr
Jan
03
Oct Ju
lA
pr
Jan
06
Oct Ju
lA
pr
Jan
09
Oct Ju
lA
pr
Jan
12
Oct Ju
lA
pr
Jan
15
Oct Ju
lA
pr580,000
590,000
600,000
610,000
620,000
630,000
Payroll Jobs Nov-11 Feb-12 Nov-12 Apr-13
…The Moody’s and Global Insight forecasts expect faster population growth than is realistic, pushing job/economic
growth expectations too high
October-12 October-13 Moody's Oct 2013
Global Insight Oct 2013
2013 1,335,730 1,330,921 1,330,000 1,329,402 1,518 598
2014 1,339,790 1,333,207 1,332,000 1,329,613 3,595 2,387
2015 1,343,630 1,335,535 1,334,000 1,329,823 5,711 4,177
2016 1,347,500 1,338,035 1,336,000 1,330,180 7,855 5,820
2017 1,351,140 1,340,394 1,339,000 1,330,537 9,857 8,463
2018 1,353,860 1,341,849 1,330,894 10,956
2019 1,356,950 1,343,643 1,331,250 12,392
2020 1,360,320 1,345,642 1,331,607 14,035
2021 1,363,360 1,347,233 1,331,450 15,783
2022 1,366,290 1,348,624 1,331,293 17,331
2023 1,349,970 1,331,136 18,835
2024 1,351,166 1,330,978 20,188
2025 1,352,348 1,330,821 21,527
YearGlobal Insight October 2013
Forecast
Population Forecasts
Forecast Difference Between OPM &:
Moody's Baseline Forecast Maine Office of
Policy & Management
Forecast
OPM population forecasts combined with past employment to population ratios for age groups indicate employment
would have peaked in 2007 without a recession
20002002
20042006
20082010
20122014
20162018
2020620
640
660
680
700
EmploymentProjected based on 2000 to 2007 avg E-Pop
Empl
oym
ent (
in th
ousa
nds)
A series break in level from the 2000 to 2010decennial Census populationas the benchmark is the primary reason for the bumpin projected employment.
This finding is based on applying the average employment to population ratio that prevailed for each age group in the eight years before the downturn to the population in that cohort to estimate what employment would have been, other things equal. Once we have recovered to “full employment,” baby boomers aging out of the labor force will take employment lower. Absent significant in-migration of working-age population, we may not see 2007 levels of employment again.
Based on our age structure and rates of labor force attachment among age groups, it will be difficult to meet
the CEFC’s April jobs forecastJa
n 0
0D
ec
No
vO
ctS
ep
Au
gJu
lJu
nM
ay
Ap
rM
ar
Fe
bJa
n 1
1D
ec
No
vO
ctS
ep
Au
gJu
lJu
nM
ay
Ap
rM
ar580,000
590,000
600,000
610,000
620,000
630,000
Nonfarm Payroll Jobs
CEFC April Forecast
Alternative Based on Population and Participation by Age Group
Appendix 1: assumptions to
alternative forecast based on employment
to population ratios by age group
The population in their peak years of labor force participation and earnings is declining, limiting job
and economic growth
16-19 20-24 25-34 35-44 45-54 55-64 65+15%
25%
35%
45%
55%
65%
75%
85%
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
Projected Population Change (right scale)Labor Force Participation Rate 2012 (left scale)Employment to Population Ratio 2012 (left scale)
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s
Age Group
Proj
ecte
d Po
pula
tion
Chan
ge 2
012-
2020
Compared to before the recession, the share of employed population is up for those age 55+ and down for younger
groups. The largest declines occurred among the youngest.
16-19 20-24 25-34 35-44 45-54 55-64 65+10%
20%
30%
40%
50%
60%
70%
80%
90%
-30%-20%-10%0%10%20%30%40%50%60%70%80%90%
-10% -6
%
-6% -3%
-4%
3% 5%
-8% -3
%
-5% -2%
-3%
3% 4%
Difference 2012 from Avg 2000-07 Difference 2012 from Avg 2000-122012 Avg 2000-07Avg 2000-12
Empl
oym
ent t
o Po
pula
tion
Ratio
s
Based on recently published population projections, what would total employment be if the employment to population ratio for each age group recovered to:
-the 2000 to 2012 average by 2015?
-the 2000 to 2007 average by 2020?
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
0
25
50
75
100
125
150
175
200
225
250
Age 16 to 19
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 26,000@avg E-Pop: 2015 +2,000; 2020 +3,000Avg monthly earnings: $541
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
0
25
50
75
100
125
150
175
200
225
250
Age 20 to 24
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 55,000@avg E-Pop: 2015 +8,000; 2020 +7,000Avg monthly earnings: $1,553
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
0
25
50
75
100
125
150
175
200
225
250
Age 25 to 34
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 100,000@avg E-Pop: 2015 +8,000; 2020 +16,000Avg monthly earnings: $2,675
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
0
25
50
75
100
125
150
175
200
225
250
Age 35 to 44
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 130,000@avg E-Pop:2015 -6,000; 2020 -8,000Avg monthly earnings: $3,614
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
0
25
50
75
100
125
150
175
200
225
250
Age 45 to 54
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 165,000@avg E-Pop:2015 -5,000; 2020 -24,000Avg monthly earnings: $3,897
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
0
25
50
75
100
125
150
175
200
225
250
Age 55 to 64
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 133,000@avg E-Pop:2015 -2,000; 2020 -3,000Avg monthly earnings: $3,855
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
20
45
70
95
120
145
170
195
220
245
270
Age 65+
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Ratio
(lin
es)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 40,000@ projected E-Pop:2015 +7,000; 2020 +21,000Avg monthly earnings: $2,590
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
0
125
250
375
500
625
750
875
1,000
1,125
1,250
Age 16+
Population Employment LFPR E-Pop
Labo
r For
ce P
artic
ipati
on &
Empl
oym
ent t
o Po
pula
tion
Rate
s (li
nes)
Empl
oym
ent &
Pop
ulati
on (i
n th
ousa
nds)
2012 Emp: 650,000@avg E-Pop:2015 +12,000; 2020 +13,000Avg monthly earnings: $3,256
Appendix 2:Recent trends in payroll jobs
Highlights:• Growing sectors tend to be human capital intensive, often requiring
specialized education, knowledge, or skills:• Healthcare & social services, professional & business services, and educational
services.• Leisure & hospitality, which tends to be labor intensive also is growing.
• Jobs in sectors that make, move, or sell physical products generally have stabilized, but there is no significant growth:• Manufacturing, construction, wholesale &retail trade, and transportation,
warehousing & utilities.
• All three levels of government continue to shed jobs.• The experience of those displaced from labor intensive work generally
does not match the education and skill requirements of growing sectors.
Dec-0
7
Dec-0
8
Dec-0
9
Dec-1
0
Dec-1
1
Dec-1
2585
595
605
615
625
Total Nonfarm Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13485
495
505
515
525
Total Private Jobs(seasonally adjusted in thousands)
Benchmarked Job Count
Estimates (to be revised March 2014)
Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1354
55
56
57
58
59
60
61
Professional & Business Services Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1397
98
99
100
101
102
Healthcare & Social Assistance Jobs(seasonally adjusted in thousands)
Benchmarked Job Count
Estimates (to be revised March 2014)
Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1358
59
60
61
62
63
64
65
Leisure & Hospitality Jobs(seasonally adjusted in thousands)
Benchmarked Job Count
Estimates (to be revised March 2014)
Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1318
19
20
21
22
Educational Services Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1318
19
20
21
22
Wholesale Trade Jobs(seasonally adjusted in thousands)
Benchmarked Job Count
Estimates (to be revised March 2014)
Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1330
31
32
33
34
Financial Activities Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1316
17
18
19
20
Transportation, Warehousing & Utilities Jobs(seasonally adjusted in thousands)
Benchmarked Job Count
Estimates (to be revised March 2014)
Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1323
25
27
29
31
Construction Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1348
50
52
54
56
58
60
Manufacturing Jobs(seasonally adjusted in thousands)
Benchmarked Job Count
Estimates (to be revised March 2014)
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1380
82
84
86
88
Retail Trade Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1312
14
16
18
20
Federal Government Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
TemporaryCensus
Jobs
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1325
26
27
28
29
State Government Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)Likely Revisions
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
1358
59
60
61
62
63
Local Government Jobs(seasonally adjusted in thousands)
Benchmarked Job CountEstimates (to be revised March 2014)
