New York State’s Labor Force Drivers Presented by Kevin Jack, Statewide Labor Market Analyst July 2008

New York State’s Labor Force Drivers

Presented by Kevin Jack, Statewide Labor Market Analyst

July 2008

Introduction

New York’s Labor Force Drivers

Summary and Conclusions

Presentation Outline

N O T E D E C O N O M I C S P R O G N O S T I C

A T O R

“The future ain’t what it used to

be.”

“You can observe a lot by just watching.”

Introduction

Labor Force Drivers

Aging Population

Slowing Population

Growth

More Diversity

Higher Skill

Requirements

The Usual Suspects: Labor Force Drivers

Aging Population

35

40

45

50

55

60

65

70

75

80

1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

U.S. Life Expectancy at Birth: 1850-2000

Source: U.S. National Center for Health Statistics

Year

Ag

eLabor Force Drivers: Aging Population

Labor Force Drivers: Aging Population

9,000 baby boomers per day

celebrated their 60th birthday in 2006.


Health Care Spending, U.S., 2005-2015

Within a decade, an aging America will spend one of every five dollars on health care. Total health care spending in the U.S. will double to more than $4 trillion by 2015.

Source: Centers for Medicare and Medicaid Services

$4.0

$2.9

$2.0

18.0%

16.2%

20.0%

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

2005 2010 2015

Hea

lth

Car

e S

pen

din

g (

$ tr

illio

ns)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

% o

f Gro

ss Do

mestic P

rod

uct


Over the next 15 years, New York’s working age population is expected to grow only by 40,000, with the largest growth among those aged 55-64. The State’s core working-age population (ages 35-54) is projected to decline by more than 600,000.

223,000

-633,000

-56,000

506,000

16 to 24

25 to 34

35 to 54

55 to 64

Source: Cornell Institute for Social and Economic Research

Projected Change in Working-Age Population (Ages 16 to 64), New York State, 2005 - 2020

Age Group Change



Labor Force Participation Rates, by Age, New York State, 2003-2005

Source: Current Population Survey

31.6%

67.1%

80.3%

81.8%

80.1%

61.5%

13.7%

16-19

20-24

25-34

35-44

45-54

55-64

65+

Labor force participation rates drop significantly after age 55.

Slowing Population Growth

Annual Rate of Change in New York State Population, 1940-2020

Projected

1.0%

1.2%

0.8%

0.5%

0.3%0.2%0.2%

-0.4%

1940-50 1950-60 1960-70 1970-80 1980-90 1990-'00 2000-10 2010-20

The rate of growth of New York’s population has slowed considerably in the past half century.

Labor Force Drivers: Slowing Population Growth

Projected Population Change in New York State

Source: NYS Department of Economic Development

Increasing Diversity

Total Population, by Nativity, New York State, 1970-2000

Labor Force Drivers: Increasing Diversity

15.11

15.14

15.17

16.13

3.87

2.85

2.39

2.11

0 5 10 15 20

2000

1990

1980

1970

Native Born

Foreign Born

Percent Foreign-born

11.6%

13.6%

15.9%

20.4%

18.24 mn

17.56 mn

17.99 mn

18.98 mn

Millions

Between 1970 and 2000, the percentage of New York State’s population that was foreign born almost doubled.

New York State’s population and labor force are becoming increasingly diverse.

Between 1990 and 2006, the state’s foreign-born population increased by more than 1.3 million (+47 percent), while its overall population increased by less than 1.3 million.

Thus, the state’s population would have registered a decline rather than a gain over the 1990-2006 period.


New York State’s population and labor force are becoming increasingly diverse.

In 2006, 22 percent of the state’s population (4.18 million) was born outside of the U.S. (rank 2nd to CA in both percent share and total immigrant count).

Top countries of origin (in descending order): Dominican Republic, China, Mexico, Jamaica, and Ecuador.

52% of immigrants have arrived since 1990, while 27 percent of immigrants (aged 5+) speak English “less than well.”


New York State’s Labor Force, 1993 and 2005

A combination of increased population aged 16+ and increased labor force participation resulted in dramatic growth in the number of Hispanics in New York State's labor force between 1993 and 2005.


Population, 16+ (1000s)Labor Force

Participation Rate (%) % Change in Labor Force

1993 2005 1993 2005 1993-2005

All Races 13,823.4

11,145.2

2,101.8

1,480.5

14,948.9

11,211.6

2,429.0

2,115.3

White

Black

Hispanic

61.6

62.3

57.3

54.4

62.9

63.5

60.6

61.3

10.3

2.5

22.1

61.1

Note: Hispanics can be of any race.



Projected Number of High School Graduates, New York State, 1997 to 2013

Source: New York State Department of Education

150,000

160,000

170,000

180,000

190,000

200,000

1997

1999

2001

2003

2005

2007

2009

2011

2013

Gra

duat

es

Year

The number of high school graduates in New York State is expected to peak at 185,000 in 2009.


Percentage Change in High School Graduates, by Region, NYS, 1997-2003 and 2003-2013

Source: NYSDOL Analysis of New York State Department of Education data

1997-2003

2003-2013

Upstate Non-Metro

NYC

Upstate Metro

New York State

NYC Suburbs32%

6%

5%

-2%

5%

6%

-4%6%

-14%-3%

Distribution of New York State Public High School Graduates, by Race/Ethnicity,

1990-91, 2001-02 and 2013-14


Academic Year

Race/Ethnic Group 1990-91 2001-02 2013-14

Black, non-Hispanic 14% 14% 14%

Hispanic 8% 11% 13%

Asian/Pacific Islander 5% 7% 13%

White, non-Hispanic 73% 68% 60%

Source: The College Board/WICHE

Hispanics and Asian/Pacific Islanders comprise an increasing share of public high school graduates in New York. In contrast, White, non-Hispanics account for a decreasing share.

Educational Attainment, Population 25 years and Over, by Race/Ethnicity, New York State, 2000


4-Year College Degree

Race/Ethnic Group

All Groups 27%

Asian/Pacific Islander 41%

White, non-Hispanic 32%

Black, non-Hispanic 16%

Hispanic 11%

Source: Census Bureau

Among those 25 years and over, much higher proportions of Asian/Pacific Islanders and White, non-Hispanics had at least a 4-year college degree.


The number of high school graduates in New York State is projected to peak at 185,000 in 2009.

The share of public high school graduates in New York State from racial/ethnic minority groups will increase over the next decade, continuing a long-term trend.

Hispanics are projected to be one of the fastest-growing groups, but the group has a relatively low 4-year college degree attainment rate.

Over the next decade:

Increasing Skill Requirements

Overview of Skill Levels of the U.S. Labor Force

• Workers need to continually upgrade their skills if they are to adapt to and take part in a continually changing economy.

• Education is a key contributor to wage level and wage growth.

• The “wage premium” paid to workers with a 4-year college degree has increased over the past 30 years.

• The science and engineering sectors of the U.S. economy remain particular concerns.

Labor Force Drivers: Increasing Skill Requirements

Factors Affecting the Growing “Wage Premium”• Effects of increasing retirements.

• Increased use of advancing technologies – most basic jobs require workers to gain escalating levels of skills and education.

• Increased global competition -- especially evident in “offshore outsourcing” of lower-skilled IT jobs.

• A 2002 BLS study estimated that over the course of their working lives, adults with a bachelor’s degree earned almost $1 million more than those with a only a high school diploma; those with a master’s degree, on average, earned $1.3 million more than high school graduates.


Average Annual Earnings by Education, U.S.

Workers with more education, on average, enjoy both higher annual earnings and faster wage growth



Workers with a bachelor’s degree earn, on average, higher salaries than those with only a high school diploma. These differences have grown over the past 30 years.


Percentage Change in First University Degrees Awarded in Engineering and Physical/Biological Sciences, 1987 - 2002

5%

26%

42%

124%

237%

U.S.

Germany

Japan

South Korea

China

Source: National Science Foundation, Science and Engineering Indicators 2006


The percentage change in the number of U.S. first university degrees awarded in the engineering and physical/biological sciences fields between 1987 and 2002 lagged that of other countries.

First University Degrees Awarded in Engineering and Physical/Biological Sciences

and Share of Total Degrees Awarded, 2002

77,800

88,100

123,100

140,400

324,600

South Korea

Germany

Japan

U.S.

China

Source: National Science Foundation, Science and Engineering Indicators 2006

49.5%

10.8%

22.5%

25.5%

32.4%

Share of Degrees in Country


The share of U.S. first university degrees awarded in the engineering and physical/biological sciences fields is significantly lower than in other countries.

Percentage Change in Projected Employment, by

Education and Training Level, New York State, 2002 - 2012

6.0%

8.8%

12.0%

13.1%

16.3%

17.9%

Moderate/Short-termOJT

Post-sec. ed/Workexp./L-T OJT

Bachelor's or higherdegree, plus work exp.

Bachelor's degree

Master's/Doctoral/Firstprofessional degree

Associate degree

Source: New York State Department of Labor

The following economic and demographic forces have and will likely continue to shape New York State’s labor force in the coming years:

Summary and Conclusions

New York, like most states, has experienced an aging population due to the graying of the baby boomers. This trend is projected to continue.

Many New York counties, especially in the Upstate region, are expected to face population pressures.

International immigration has increased the diversity of New York State’s population and labor force; this trend is expected to continue.

Skill requirements for U.S. workers continue to increase due to: increasing retirements, increased use of technology, and growing global competition

These factors have contributed to a growing “wage premium” paid to more highly educated workers over the past 30 years.

Summary and Conclusions (continued)

Global competition in higher education, especially in the science and engineering fields, is becoming an increasingly important economic issue.

Long-term occupational projections for New York forecast that jobs requiring at least some college education will grow fastest over the next decade.

Summary and Conclusions (continued)

New York State’s Labor Force Drivers

Presented by Kevin Jack, Statewide Labor Market Analyst

Phone: (518) 457-2919 email: [email protected]

Documents

New York State’s Labor Force Drivers Presented by Kevin Jack, Statewide Labor Market Analyst July 2008