Presentation by Rose Baker and David Passmore at a meeting hosted by Day & Zimmerman (http://dayzim.com) on 28 January 2015.

1. Factors Affecting
Labor Availability
Rose Baker
David Passmore

2. Rose Baker
David Passmore
Professors at Penn State….

3. DEMOGRAPHY PIPELINE
POLICY &
REGULATION

4. DEMOGRAPHY PIPELINE
POLICY &
REGULATION

5. DEMOGRAPHY

6. From the “Population Clock” of the U.S. Bureau of the Census

7.  Larger population — An increase of 33 million
 Slower growth — Primarily result of aging
population
 Older population — 55+ comprise 25% of population
in 2010, 30% in 2020
 More diverse population — Every race/ethnicity
grows, but share of White/non-Hispanics decreases
Changing size & composition
Source: U.S. Bureau of Labor Statistics

8.  Births — Birth rate stays same, different for
racial/ethnic groups, affects size and composition of
future workforce
 Deaths — Longer life expectancy due to changing
health habits and improved medicine, with some
effect on workforce
 Immigration — Volatile force due to policy and event
uncertainty, immigrants likely to double, affects size
and composition of workforce — and births
Drivers — certain & uncertain
Source: U.S. Bureau of Labor Statistics

9. DEMOGRAPHY

10. -2.5%
-1.5%
-0.5%
0.5%
1.5%
2.5%
3.5%
TOTAL 16-24 years 25-54 years 55+ years
Percentage Change, 2010-2020
….Except for older people
Source: U.S. Bureau of Labor Statistics

11. The labor force is aging
Source: U.S. Bureau of Labor Statistics

12. Immigrants in 2010 made up 13% of the population, but 16% of labor force
Source: 2010 Current Population Survey

13. U.S. born more likely managers than the foreign born, who are more likely laborers
Source: 2010 Current Population Survey

14. DEMOGRAPHY

15. Hopes are that decline in labor force participation would reverse, but…..
Source: U.S. Department of Labor & Wall Street Journal

16. But, fewer of those outside the labor force have found jobs or begun looking…..
Source: U.S. Department of Labor & Wall Street Journal

17. While the unemployed have become more likely to drop out
Source: U.S. Department of Labor & Wall Street Journal

18. “Every generation wants to be the last.” — Chuck Palahniuk, Lullaby
DEMOGRAPHY

19. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives

20. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives
Born 1946 to
1964; took over
from WW II
generation

21. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives
Born 1946 to
1964; took over
from WW II
generation
Differences
among youth
experiences of
“Tweeners” (early
60s), “Older
Boomers” (late
60s), “Younger
Boomers,” (early
70s)

22. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives
1965-1980
1981-1995;
“Millennials”

23. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives
1965-1980
1981-1995;
“Millennials”
Major
portion of
current
workers
Most of the
full-time
workforce
by 2020

24. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives
Born after
1995;
“NextGen”
and
“Generation
2020”

25. Affect work behavior
Baby
Boomers
Gen X
Gen Y
Digital
Natives
Born after
1995;
“NextGen”
and
“Generation
2020”
Wireless
and Web
2.0 since
childhood

26. 45%
40%
10%
5%
Percentage of Current Workforce
Baby Boomers
Gen X
Gen Y
Traditionalists
But, the structure is evolving
Source: U.S. Bureau of Labor Statistics

27. DEMOGRAPHY PIPELINE
POLICY &
REGULATION

28. PIPELINE

29. ManpowerGroup 9th Talent Shortage Survey
36%of employers globally
report talent shortages in 2014

30. ManpowerGroup 9th Talent Shortage Survey
36%of employers globally
report talent shortages in 2014
The highest percentage in
seven years.

31. ManpowerGroup 9th Talent Shortage Survey
36%of employers globally
report talent shortages in 2014
The highest percentage in
seven years.
U.S., at 40%, slightly above global average

32. Source: ManpowerGroup

33.  One–third of contractors concerned about skilled
trade shortages
 Nearly one-half of contractors concerned about
finding experienced trade workers, especially with
>10 years experience
 Six of ten concerned about loss of knowledge as
leaders retire
 Six of ten concerned about loss of experience during
layoffs
 One–half concerned about inadequate education
Source: McGraw-Hill Construction

34. Can’t serve clients
Source: ManpowerGroup

35. Lack of technical skills….no applicants
Source: ManpowerGroup

36. People practice strategies
Source: ManpowerGroup

37. Additional training and development….redefining qualifications
Source: ManpowerGroup

38. PIPELINE

39. The Workforce Gap
 Where 9th graders are
headed:
◦ 28% enter college
◦ 32% get associate
degree or advanced
training
◦ 10% lack the skills or
plans needed to prepare
for work
◦ 30% will drop out before
completing high school
Source: Workforce 2020: Work & Workers in the 21 Century

40. The Workforce Gap
 Where 9th graders are
headed:
◦ 28% enter college
◦ 32% get associate
degree or advanced
training
◦ 10% lack the skills or
plans needed to prepare
for work
◦ 30% will drop out before
completing high school
 Where the jobs are:
◦ 20% require a college
degree
◦ 65% require an associate
degree or advanced
training
◦ 15% require minimum
skills for employment
Source: Workforce 2020: Work & Workers in the 21 Century

41. The Workforce Gap
 Where 9th graders are
headed:
◦ 28% enter college
◦ 32% get associate
degree or advanced
training
◦ 10% lack the skills or
plans needed to prepare
for work
◦ 30% will drop out before
completing high school
 Where the jobs are:
◦ 20% require a college
degree
◦ 65% require an associate
degree or advanced
training
◦ 15% require minimum
skills for employment
Source: Workforce 2020: Work & Workers in the 21 Century

42. The Workforce Gap
 Where 9th graders are
headed:
◦ 28% enter college
◦ 32% get associate
degree or advanced
training
◦ 10% lack the skills or
plans needed to prepare
for work
◦ 30% will drop out before
completing high school
 Where the jobs are:
◦ 20% require a college
degree
◦ 65% require an associate
degree or advanced
training
◦ 15% require minimum
skills for employment
Source: Workforce 2020: Work & Workers in the 21 Century

43. The Workforce Gap
 Where 9th graders are
headed:
◦ 28% enter college
◦ 32% get associate
degree or advanced
training
◦ 10% lack the skills or
plans needed to prepare
for work
◦ 30% will drop out before
completing high school
 Where the jobs are:
◦ 20% require a college
degree
◦ 65% require an associate
degree or advanced
training
◦ 15% require minimum
skills for employment
Source: Workforce 2020: Work & Workers in the 21 Century

44.  Percentage with entry–level skills deficits
◦ 65% reading
◦ 77% math
◦ 48% speaking
 Percentage with advanced skills deficits
◦ 71% ethics
◦ 54% listening
◦ 72% writing
◦ 70% work ethic
◦ 60% computer use
Entry–level & advanced skills deficits
Sources: U.S. Department of Education, National Center for Education Statistics, and National Assessment of Educational Progress

45.  Percentage with entry–level skills deficits
◦ 65% reading
◦ 77% math
◦ 48% speaking
 Percentage with advanced skills deficits
◦ 71% ethics
◦ 54% listening
◦ 72% writing
◦ 70% work ethic
◦ 60% computer use
Entry–level & advanced skills deficits
Sources: U.S. Department of Education, National Center for Education Statistics, and National Assessment of Educational Progress
Harvard Pathways to Progress
Study concluded, “Far too many
young people are inadequately
prepared to be successful.”

46. No One Is Interested?
6%of high school students hope to
have a future in skilled trades
Sources: A recent survey by RIDGID, a leading supplier of professional grade tools

47. No One Is Paying Attention?
6%of high school students hope to
have a future in skilled trades
Even though demand is high
Sources: A recent survey by RIDGID, a leading supplier of professional grade tools

48.  53% skilled trades do not interest them
 24% not mechanically inclined
 21% do not know enough about skilled trades
 15% believe job opportunities are thin in skilled
trades
 11% do not view skilled trades as “cool”
 10% do not believe they have high tech skills
required for skilled trades
Sources: A recent survey by RIDGID, a leading supplier of professional grade tools

49.  54% believe working with computers has better
future than skilled trades
 36% say that working in an office is more respected
than working with hands
 25% see skilled trades jobs as “old fashioned”
Sources: A recent survey by RIDGID, a leading supplier of professional grade tools

50.  Taking a career and technical education course
doubles interest in a skilled trades career
 Most students who took career and technical
education courses have a realistic knowledge about
pay, flexible hours, free training, and benefits offered
in skilled trades
 Students with a relative or friend in skilled trades are
about 1.5 times more likely to choose skilled trades
careers than students without these contacts
Sources: A recent survey by RIDGID, a leading supplier of professional grade tools

51.  Training, certification, and career education
increased in quantity and quality, with improved
employer involvement
 But skills improvement is through traditional evening
and weekend approaches, with reluctance to use
regular business hours.

52. Manpower, Inc.
“Approximately three-quarters of employers globally
cite a lack of experience, skills or knowledge as the
primary reason for the difficulty filling positions.
“However, only one in five employers is
concentrating on training and development to fill the
gap and only a mere 6 percent of employers are
working more closely with educational institutions
to create curriculums that close knowledge gaps.”

53. DEMOGRAPHY PIPELINE
POLICY &
REGULATION

54. POLICY &
REGULATION

55.  Safety and Health Act of 1970 — ensures safe and
sanitary work environments through inspections and
a grading scale, changes frequently
 Environmental — Carbon footprint regulated by EPA
and state agencies, Environmental Compliance
Assistance Guide exists to help businesses achieve
compliance

56.  Fair Labor Standards Act — Minimum wage for
workers in the United States by Wage and Hour
Division, decisions made by Division affected more
than 130 million workers as of 2010
 Employee Retirements Income Security Act —
Ensures retirement plan options and health care
benefits for full-time employees
 Immigration and Nationality Act — Only citizens and
people with work visas hired, I-9 eligibility required
Minimum wages, benefits, safety and health compliance, work for non-U.S. citizens, working
conditions, equal opportunity employment, and privacy regulations

57. POLICY &
REGULATION

58.  Supply — Some provisions raise tax rates on wages
and reduce the amount of labor supplied
◦ By 2016, net reduction of 1.5% to 2% of total work hours
◦ Lower-wage workers disproportionately affected
◦ 1% reduction in labor compensation
 Demand — Some provisions raise costs of labor and
reduce the amount of labor demanded
◦ Employers could reduce numbers of workers, not wages
(sticky and regulated)
◦ Employers could divide jobs, but this could be costly.
Supply & demand — “Make something more expensive, people buy less of it”
Sources: Congressional Budget Office

59.  Supply — Some provisions raise tax rates on wages
and reduce the amount of labor supplied
◦ By 2016, net reduction of 1.5% to 2% total work hours
◦ Lower-wage workers disproportionately affected
◦ 1% reduction in labor compensation
 Demand — Some provisions raise costs of labor and
reduce the amount of labor demanded
◦ Employers could reduce numbers of workers, not wages
(sticky and regulated)
◦ Employers could divide jobs, but this could be costly.
Supply & demand — “Make something more expensive, people buy less of it”
Sources: Congressional Budget Office
Reduces labor supply, lowering
employment slightly. Less effect
on demand for number of
workers and hours of work.

60. Factors Affecting
Labor Availability
Rose Baker
David Passmore