Last Saturday I was on a 4-person panel convened by State Senator John Kefalas to talk about the future of the workforce. Since we only had 10 minutes each for comments before the Q&A, I rummaged around in the attic of my brain for things I’ve been thinking about relative to workforce and presented them on one slide like this:
Numbers to Ponder
I-25
9th out of 365
250,000 in 2045, 164,825, additional 65,050 jobs
– 10-15%
$31,608 vs. $55,628
$38,877 (‘07) $37,732 (‘09) $41,311 (‘12)
66.2% to 62.7%
39% of 16-24 years old, +10% in 14 years
7% (‘95) 15% (‘14) ~20% (‘20)
3 billion vs. 1.2 billion
50 – 60 years, technology revolutions
42% vs 45% vs 72%
0.52% (‘02) to 0.34% (‘12)
Here’s what they mean:
I-25. As in Interstate 25. My point to the group was that the growing congestion on I-25 is shrinking the labor-shed to the detriment of both employers and jobseekers.
9th out of 365. This is how Fort Collins ranks in under-employment. Out of 365 metro areas in the nation, we are 9th in the percentage of our residents that are working at jobs below their education attainment level. In essence, the community isn’t producing enough good-paying jobs.
250,000 in 2045, 164,825, additional 65,050 jobs. The population of Fort Collins will grow to 250,000 by the year 2045. That’s not the goal, but based on demography, it is likely. A city of that size will need a workforce of around 165,000 people. The punch line is that the community will need to add a net of 65,050 more jobs in the next 30 years.
-10-15%. This is the share of jobs the typical community loses every year through the natural creative destructive process of capitalism. Most displaced workers are able to transition into a new role. The point here is to stay focused on the fact that jobs do disappear in the natural course of things and to pay attention to the need to replace them.
$31,608 vs. $55,628. All jobs have intrinsic value but some have more economic value. $31,608 is the average wage of non-primary employer jobs in Fort Collins. $55,628 is the average wage for primary jobs in Fort Collins. Primary employers are companies, large and small, that produce more than they consume locally and sell at least half of it outside the market. Primary jobs drive economic prosperity.
$38,877 (‘07), $37,732 (‘09), $41,311 (‘12). These numbers are the per capita personal income in Larimer County for 2007, 2009 and 2012. You need to look at a variety of numbers to get a good understanding of what is going on in a local economy, but per capita personal income is a good overall indicator. These numbers show the impact of the Great Recession in 2009.
66.2% to 62.7%. The national labor participation rate has declined from 66.2% in March 2006 to 62.7% today. We are at the lowest rate since 1984. This is a disturbing number to me because as job openings have gone up, labor participation has not. It’s an indication that we are incenting people not to work through public support programs.
39% of 16-24 years old, +10% in 14 years. Here’s another disturbing number. 39% of 16-24 year olds don’t want a job. That’s up 10% over the past 14 years. This is an indication of work ethic and motivation. This reflects in lifetime earnings and the quality of entry level skills when this job does eventually make it into the workforce.
7% (‘95), 15% (’14), ~20% (‘20). These numbers represent the growing ‘freelance economy,’ with 7% of people working independently in 1995 growing to 15% by 2014 and estimated to grow to 20% by 2020. Is this by choice or necessity and is it good or bad? My answer to the group was ‘yes’ and ‘yes’. It is both choice and necessity and both good and bad. For the short-term many displaced seasoned workers and new grads have had to make their own way by creating their own job. The big plus in all of this is that a more fluid and flexible way of working has emerged that deploys talent in a timely way to where it’s most needed.
3 billion vs. 1.2 billion. A few years ago Gallup Corporation did a worldwide survey on attitudes regarding work. They found that 3 billion people want good paying jobs (defined as steady work, 30+ hours per week). The rub is that only 1.2 billion such jobs exist. This could be a point of social and political unrest in different countries around the world. The key message for us is that our workers are competing globally and that our primary employers are other communities’ prospects. Staying focused on creating a good business climate and creating jobs should be Job 1 of all local leaders and policymakers.
50 – 60 years, technology revolutions. Every couple of generations we go through massive techno-economic revolutions. While they propel us forward, they are also disruptive. We are in the middle of one of those revolutions and some of the numbers cited above are indicative to the impacts. According to Future Trends, the last 5 techno-economic revolutions include: the Industrial Revolution (1771, started in Britain), the Age of Steam & Rail (1829), the Age of Steel, Electricity, Heavy Engineering (1875), the Age of Oil, Auto, Mass Production (1908) and the Age of Information / Telecommunications (1971). In the middle of these revolutions, old models and processes no longer work very well and begin to change, and there is a glut of capital and surplus of labor. This type of change / disruption is ripe for temporary political ‘solutions’ that become permanent or long standing – minimum wage increases, Lifeline Assistance Program, mortgage assistance programs, expansion of disability insurance, food stamps, health care subsidies, etc.
42% vs. 45% vs. 72%. There is a lot of talk in the country about a ‘skills gap’ between what employers need and what works can do. In some locales that leads to the ironic situation of companies saying they can’t find good workers while the unemployment rate or underemployment rate is higher than average. However, these numbers represent a ‘perception gap.’ Research by McKinsey & Company found that 42% of business executives believe that students are ready for work and students generally agree with that with 45% saying students are ready. The punch line is that 72% of educators think young people are work-ready. This would indicate a need for closer collaboration between business and education providers.
0.52% (‘02) to 0.34% (‘12). But, businesses have some culpability when it comes to the quality of the workforce. These numbers reflect a decline of in-house company training programs. According to Training Magazine, the share of GDP spent on instruction fell from 0.52% in 2000 to 0.34% in 2014.
What’s the story with all of these numbers? The message is that infrastructure (think I-25) impacts labor, be conscious as community leaders about disruptive macro-changes that impact the community and be proactive in doing something to create good paying jobs while not reaching for non-solution solutions. Finally, the working relationships between education providers and business leaders at all levels could be strengthened.