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The United States is in the midst of a global economic war, and many Americans may not know it.
Even fewer realize we may be falling behind.
That’s the opinion of John Twomey, executive director of the New York Association of Training and Employment Professionals, an Albany-based advocacy group, who yesterday offered the Finger Lakes Workforce Investment Board a look at the changing face of American employment.
“We’re in a global struggle to get the U.S. work force ready to compete, yet we are spending only 11.7 percent of what we invested 28 years ago,” Twomey told a gathering of local board members, employers, educators and government officials at the Ramada Inn Geneva Lakefront.
Twomey outlined the challenges of the next decade and stressed the need for a coordinated effort to develop and train workers.
He said the country’s economy is in for a major upheaval caused by seven key factors: retiring baby boomers, shifting demographics, increased payoff on education, global competition, immigration, offshoring versus technology, and a trend toward multiple careers.
Those things will continue to eliminate jobs that allowed families to earn a middle class living in the past, he said.
Baby boomers,
demographics
and education
The number of retiring baby boomers is the biggest factor contributing to the changing workforce, said Twomey, noting that two generations will be leaving the workforce simultaneously for the first time ever in a 10-year span. That means a lot of highly skilled people will need to be replaced, he added.
Shifting demographics is another major factor, Twomey said, adding that today 73 percent of the U.S. workforce is white but by the year 2050 that number will drop to 53 percent.
Hispanics today comprise only 11 percent of the workforce, but by 2050, that number is likely to rise to 24 percent. Yet we court disaster by allowing a 38 percent Hispanic high school dropout rate, Twomey said.
He also noted labor force growth rates for 1993 to 2003, which hit 71 percent for Hispanics and just five percent for whites.
Increased payoff on educational attainment is a third factor, Twomey said, noting that most adults and students underestimate the impact of a college degree on earnings. He pointed out that adults who are college graduates earn 70 percent more per year than adults who are high school graduates alone.
Twomey also cited employment changes, including that there were 400,000 fewer jobs that high school dropouts could do from 1992-2002. He noted that education after high school matters, especially given that 75 percent of new job growth requires some level of post-high school training. Unfortunately, only four percent growth in workers with post-high school education is expected between 2000-2020, he said.
Twomey also cited state Education Department statistics from 2005. In reading, 50 percent of African American students, 48 percent of Latino students and 43 percent of white students were below basic fourth-grade reading levels. In Grade 8 Math, 54 percent of African American students, 49 percent of Latino students and 17 percent of white students were below basic levels. And only 42 and 45 percent of Latino and black ninth-grade students, respectively, graduated four years later. Nearly 70 percent Asian and over 80 percent of white ninth-graders graduated in four years.
Compounding the problem is that poor and minority students receive more inexperienced teachers, and math and science classes of mostly minority students are more often taught by misassigned teachers, Twomey said.
“Education figures need to be fixed, otherwise everything else is just a Band-Aid,” he remarked.
There are flaws later in the system, as well, Twomey said, noting that this year New York’s community colleges will graduate 7,000 more associate’s degree recipients than can be accepted into the state’s four-year SUNY colleges. And even though 62 percent of community college students work full-time nationally, those who don’t earn a 3.0 grade point average can’t get into SUNY Albany, Twomey said.
“If all the pay off is in education, how can we let this be?” asked Twomey.
Global marketplace
Worldwide competition is another factor contributing to the changing workforce, Twomey said, noting that last year 1.3 million four-year college students graduated in the United States, the same total as six years earlier. Meanwhile in China, 2.5 million four-year college students graduated last year, a significant increase from the 950,000 graduates in 1999.
The U.S. is also falling behind when it comes to college completion, he said. In 1970, 30 percent of U.S. students completed college, which increased to 39 percent in 2001. However, Ireland jumped from 20 percent to 48 percent and Spain from 16 percent to 36 percent, Twomey said.
Right now, immigration is a gigantic factor, Twomey said, remarking that in the last five years, 43 percent of all the population growth in the United States has been from immigration.
Also, nearly 80 percent of immigrants are working, more than the overall U.S. labor force. In 1980, about eight percent of U.S. workers were foreign born. In 2000, that number nearly doubled.
Twomey also noted that over 36 percent of immigrants are high school dropouts, though only 11 percent U.S.-born workers are dropouts. Immigration has affected U.S.-born youths, who are competing for unskilled jobs with foreign born workers, he added.
Historically, immigration policy is based on family ties, not what skills the potential immigrant brings to the country, he said, adding that he believes it should reflect a larger, overall workforce development effort.
Twomey also talked about offshoring versus technology. By 2030, the number of workers needed stateside with far exceed the number available, Twomey said.
“But if you can’t get workers [here] and can do the work somewhere else, that’s what’s going to happen,” he said.
Technology is playing a role, though, he said. For example, General Motors manufactured the same number of cars 20 years ago as today, though with 50 percent fewer workers, he explained.
Another important point, he said, is how often people will be changing jobs in the next decade or so. The average job will last three to five years, according to the U.S. Labor Department, and the average person today will have 10 to 14 careers.
To compete and win in the global war, the county needs to spend more money on changes, Twomey emphasized.
He noted that according to the General Accounting Office, the federal investment was $9.5 billion in 1970 for the federal Comprehensive Employment Training Act, a predecessor to the Workforce Development Act.
That would equal $30 billion in today’s dollars, he said, comparing it to the $3.5 billion in funding set aside for Workforce Development.
What needs to be done
Despite all the numbers, Twomey said he’s optimistic the U.S. can turn it around.
“I’m upbeat because in the last year, I’ve met with more decision makers and seen greater awareness by the general public that we’re in a global economic war,” said Twomey. “… I’m optimistic because I do think we’re a really competitive country.”
Every first-year high school student and their parents need to know what jobs are on the near horizon, so that they can take the appropriate math and science sequence, he said, adding that the payoff for college and post-high school training needs to be well understood.
“We need to do a better job of making sure parents and kids know what’s going on in the economy and that the payoff is in education,” said Twomey. “It’s imperative people take high [level] math, and we need to get more science and math teachers.”
Twomey said we also need to find ways to make college more affordable and work effectively to tell people what jobs are out there and what skills are needed.
“We need to work with educators, with parents and work with businesses to help them recognize the changing labor markets and the impact on its population,” said Karen Springmeier, executive director of the Finger Lakes Workforce Investment Board. “… There’s a demand now for accredited automotive technicians, who can make [an average of] $80,000, but we’re not directing our children to those jobs.”
Cuts don’t help
The Finger Lakes Workforce Investment Board is bracing for a 22 percent drop in government funding for the fiscal year beginning July 1. The agency, which helps fund workforce development departments in Wayne, Yates, Ontario and Seneca counties, would get about $500,000 less — $1.7 million instead of $2.2 million. Reasons for the reduction, in part, including an improving economy.
“We may have a five percent unemployment rate, but the dynamics of the labor force is changing,” said Springmeier, adding that the government is not just cutting training, but the ability to prepare workers for the future.
The board operates what are called one-stop centers, which bring together a number of services designed to help people find jobs and to help employers find workers. Visitors can find help with resumes, computer skills and vocational training.
“It will definitely hinder our efforts,” said Springmeier. “Obviously, we’ll have to make cuts somewhere.”
That could mean a leaner staff, scaling back services or availability in five locations, Springmeier said, noting that other funding sources, such as grants, are being sought help bridge the gap.
“I think what we’re doing is the right thing in bringing partners to the table — businesses and economic developers and educators to address some of the issues and challenges in the labor market,” she said.