Wednesday, September 24, 2014

Women Outperform Men in Educational Attainment

By Jim Robson, Senior Economist

One very important aspect of U.S. economic success, prosperity and growth over the decades has been increasing educational attainment of the populace over time. An educated workforce is associated with higher productivity, increasing real incomes, and better standard of living.

Levels of education have risen steadily in America over the past 73 years. In the 1940 Census, 24.5 percent of people age 25 and over had at least a high school diploma. By 2013 this had increased to 86.6 percent, with 29.6 percent having attained a bachelor’s degree or higher.

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In recent years, one trend of particular note has been the relatively large increase in educational attainment of women. This trend is most readily illustrated by examining the educational attainment among the younger generation, those 25 to 34 years of age.

The 2000 Census showed nationally that 81.9 percent of males, ages 25 to 34 had at least a high school diploma, increasing to 87.0 percent as measured by the American Community Survey (ACS) in 2013. Females, 25 to 34 years of age, registered 85.9 percent with at least a high school diploma in 2000, increasing to 90.2 percent in 2013.

When you look at college-level education at the national level, women significantly surpassed the level of attainment by men. In 2000, 25.7 percent of U.S. males 25 to 34 years of age had a bachelor’s degree or higher, increasing to 28.9 percent by 2013. For U.S. women of the same age, measured attainment of a bachelor’s degree or higher was 29.4 percent (3.7 percentage points above the men) in 2000, increasing by 7.5 percentage points to 36.9 percent in 2013.

Looking at this same data for those in the 25 to 34 age group in Utah, we see that men exceeded the educational attainment levels of men nationally for those with at least a high school education. Utah men had similar levels as men nationally with a bachelor’s degree or higher. In 2000, 25.6 percent of Utah men had a bachelor’s degree or higher, in 2013 it had increased to 29.9 percent.

For Utah women in the 25 to 34 age group, 93.3 percent—3.1 percentage points above the national level for women—have a high school diploma or above in 2013. While more Utah women in 2013 have a bachelor’s degree or higher (33.1 percent) than Utah men (29.9 percent), Utah women are 3.8 percentage points below the national level. This is an improvement for women in Utah relative to the national level recorded in 2010, when Utah women were 5.6 percent below the U.S. percentage of 35.0 percent with a bachelor’s degree or higher.

Friday, September 19, 2014

Declining Labor Market Dynamics

A recent academic article published in the IZA Journal of Labor Economics (Henry R Hyatt and James R Spletzer, 2013, 2:5, explores the trend of declining employment dynamics over the last two recessions. What are labor market dynamics and why are they important? Simply put, dynamics occur in the labor market as businesses and workers begin and end their relationships, i.e. hiring and separation activity. This movement is generally associated with economic improvement; workers and employers finding more productive matches. Businesses find the most productive workers and workers find higher wages and more preferred working conditions. Hyatt and Spletzer found that at the national level the last two recessions brought declines in labor force dynamics but the recoveries did not bring with them increases in hiring and separations. The resulting status is a lower overall level of labor market dynamics today than the levels prior to the recessions and along with it concern as to whether the nation is missing out on the benefits of labor market movement.

Reading these results made me wonder whether Utah was experiencing the same trend. As a state whose economy is touted as one of the top five in the nation, with job growth rates far exceeding national averages, could it be that Utah also has stronger labor market dynamics? Is Utah experiencing the same decline in hiring and separations as the nation, or is our strong economy a result of productive labor market matches?

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Surprisingly, Utah does NOT buck the national trend. Quarterly hires and separations rates in Utah mirror the nation with stepwise decreases occurring in recessionary periods. Instead of labeling our state as the exception (as we often have the luxury of doing) we are following the rule and therefore should ask the same questions Hyatt and Spletzer pose in their research. 
  • Is this a result of changing demographics, such as an aging workforce or differences in labor force participation between men and women?
  • Could the trend perhaps be driven by changes in industry structure in our state?
  • Should we rethink our theories on labor market dynamics? Maybe lower dynamics is a sign of high adjustment costs, worker uncertainty, the housing lock, or changes in the production process.
Here I challenge my fellow economists at DWS to explore these possible explanations. Is Utah also missing out on higher wages and increased productivity, or is it time to rethink how we understand labor market dynamics?

Thursday, September 18, 2014

Can you find your career future in the stars?

New projections and star ratings provide general career guidance

 By Lecia Parks Langston, Senior Economist

Here at the Utah Department of Workforce Services (DWS) we’ve taken Edgar R. Fiedler’s advice to heart. He said, “If you have to forecast, forecast often.” Every two years, DWS economists use current trends to project occupational growth and replacement needs into the future.

Once these projections are completed, star ratings are assigned based on both employment outlook and wages. Star ratings are meant to provide general guidance for those seeking high-demand/high-wage positions and are not the final word on the desirability of a particular occupation. The accompanying list outlines the best of the five-star jobs in Utah, those with the best employment outlook and the highest wages.  More detailed information on individual occupations (including regional data) can be found here.

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Not surprisingly, most of the “best of the five-star jobs” typically require at least a bachelor’s degree. Only one occupation in this group shows merely a high school diploma prerequisite. However, this job (supervisor/managers of mechanics, installation and repair workers), also necessitates notable time spent in on-the-job training and experience in a related occupation.

The recently-released projections cover the years 2012 to 2022. Don’t be deceived. These projections are not “old” just because the base year is 2012. The projections process follows federal timing requisites and use the most current data available. Projections are currently available for Utah and eight substate regions.

Most broad trends remain unchanged in the current projection set from previous sets. We’re continually monitoring and projecting patterns that encompass all employed persons. It takes countless individual changes to alter the shape of the entire labor market. In other words, the general configuration of the labor market changes quite slowly. It should be comforting to realize that the same general patterns emerge with each new set of projections. Projections do catch current trends and provide reliable information for future decision-making.  A few facts and trends of note follow:

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  • Projections show that on average, Utah employment will expand by an annual rate of 2.4 percent between 2012 and 2022—essentially unchanged from the last projections set.
  • The state is expected to create an average of 62,730 openings each year over the projection decade.
  • Roughly 49 percent of those openings should result from the need to replace workers leaving an occupation, while the remaining 51 percent should be due to expansion in the economy.
  • Washington County is projected to show the most rapid regional growth (3.5 percent, annually) and central Utah the lowest rate of expansion (1.4 percent).
  • Healthcare support occupations, which require lower skill levels than practitioners and technical workers), should show the most rapid annual rate of expansion (3.9 percent), followed by construction/extraction occupations (3.3 percent), the higher-skilled healthcare practitioners and technical group (3.2 percent), and computer/mathematical occupations (3.2 percent).
  • Farming, fishing and forestry occupations are expected to show the lowest annual growth; a mere 0.1 percent.
  • Office/administrative support (clerical) occupations are projected to create the most employment opportunities followed by sales and food preparation/serving occupations.
  • On a detailed level, retail salespersons, customer service representatives, fast food workers and cashier occupations should provide the most job opportunities.
  • Entry-level educational requirements suggest that occupations requiring at least a bachelor’s degree will show the fastest growth rate over the next decade.
  • More than 63 percent of job growth in the next decade is expected to occur in jobs requiring a high school education or less.
For visualizations of statewide and regional projections data, click here.

Tuesday, September 16, 2014

Industry Profile: Oil and Gas Extraction in Utah

Tyson Smith, Regional Economist

Oil and natural gas production in the United States has been booming in recent years, and it looks like 2014 will be a banner year for the U.S. oil and gas industry. Domestic crude oil production reached a 27 year high in July and a September report from BP asserts that the U.S. has become the global leader in natural gas production. In 2011, the United States was the third largest producer of crude oil behind Saudi Arabia and Russia. The impact of the oil and gas boom has been felt here in Utah as well.

The oil and gas industry plays an important role in the Utah economy, especially in the eastern region of the state. According to the Department of Natural Resources, Utah ranked 11th in U.S. crude oil production and 10th in gross natural gas production in 2011. The fact that oil and gas extraction employment in Utah equates to approximately one-tenth-of-one percent of total payroll employment understates its value to the economy – especially in the oil and gas communities of eastern Utah. The wages paid to workers in the industry far exceed the average state wage, and the export value of these natural resources contributes significantly to Utah’s gross domestic product.

The infographic below provides some of the most relevant data specific to Utah’s oil and gas production and extraction industry employment.

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Click here for Printable PDF

Wednesday, September 10, 2014

Moonlighting; Holding a Second Job in Utah

By Lecia Parks Langston, Senior Economist

Do you think more of us are working two jobs to make ends meet? Think again. Recently-released data from the U.S. Bureau of Labor Statistics (BLS) on multiple jobholding in states indicates a smaller share of Utahns hold more than one job today than they did a decade earlier. During 2013, 6 percent of Utahns moonlighted. Only 2010 showed a lower rate. In addition, given the margins of survey error for this figure, 2010 and 2013 are not statistically different.
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BLS began tracking the percentage of workers holding more than one job by state back in 1999. Between 1999 and today, Utah’s highest level of multiple jobholding occurred in 2003 when 9 percent of workers held more than one position. By 2013, that share had dropped to 6 percent.

Changing demographics may contribute to the declining rate of multiple jobholding. A BLS study of multiple jobholders in the 2000s found that teenage and older workers were least likely to hold more than one job than other workers. As the vast baby boomer cohort ages and has weaker attachment to the labor force, they are less likely to moonlight.

Friday, September 5, 2014

Utah’s Abundantly Young Labor Force

By Jim Robson, Economist

After World War II, the “baby boom” generation was born in the United States, usually defined as births occurring from 1946 to 1964. Utah birthed almost 452,000 across that period. In 2012, baby boomers ranged in age from 48 years to 66 years old. The 2012 American Community Survey estimated size of the Utah’s baby boom generation was 513,300. This is 61,300 individuals more than those actually born in Utah from 1946 to 1964. The reason is that in subsequent years, on average, there has been positive net migration into Utah. More people of all ages move into the state then leave. So even with attrition due to deaths among baby boom generation Utahns, the size of this population cohort has increased by 13.6 percent.

The first graph shows the 2012 estimate of Utah’s labor force by age group. One obvious question is how difficult will it be to replace boomers is Utah over the next 15 to 20 years as this rather large cohort of workers retires. Fortunately for Utah the answer does not carry the negative weight that it does at the national level. Utah’s traditionally high fertility rate and positive net migration have endowed the state with the nation’s youngest population. This means there is plenty of young labor and then some to replace the aging boomers (second graph). In Utah, there are 956,000 people ages 5 to 24 that will be supplying the workers over the next 20 years, while 513,300 of the baby boom generation pass into retirement.
Utah’s relatively young, large, educated, energetic and growing workforce are important characteristics for our continued above average economic success. It makes it possible to continue with a vibrant economy even as the accomplished and skilled baby boomers move to retirement.

Tuesday, September 2, 2014

Utah’s Employment Dynamics Remain Historically Low, But Improving

John Krantz, Research Economist

Employment dynamics looks at the churning in the labor market (e.g., hires and separations). This contrasts with labor market snapshot measures like monthly employment and unemployment. Employment dynamics provide important insights into the functioning of the labor market. Janet Yellen, Chair of the Federal Reserve, frequently cites employment dynamics in her national labor market assessments. These, in turn, influence the course of monetary policy. Both nationally and in Utah, the churning in the labor market is less dynamic today than it was in 2000. Recent research suggests the decline in employment dynamics stems from fewer employed individuals moving to new jobs, and fewer jobs today of short duration (less than three months).

In a recent speech, Ms. Yellen referenced employment dynamics data, along with other labor market data, to argue that the national labor market is still somewhat weak. Figure 1 shows the flows of hires, quits and total separations in the national labor market and is based on the Job Openings and Labor Turnover Survey (JOLTS) data from the U. S. Bureau of Labor Statistics (BLS). Ms. Yellen noted that the level of quits is still low, even though it has been increasing since the beginning of 2010. Nationally, the number of quits in January 2001 was roughly 3.4 million. In June 2014, the level was only 2.5 million.

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When quits are low, the general interpretation is that workers are reluctant to leave their current jobs because they fear they will not be able to find another job. It also implies that firms are not vigorously competing for labor through high wage offers that would induce individuals to more readily quit their current jobs.

JOLTS data are not available at the state level, but there is a Utah labor market churn representation   through the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics (LEHD) program. Figure 2 shows the total hires and separations in Utah’s labor market and can be compared with the national JOLTS data in Figure 1. Figure 2 is the actual level of churn. As Utah’s labor force has been growing over time, the relative decline in churn is even greater.

A clearer method for viewing Utah’s labor-churn decline is to divide hires and separations by total employment. This yields labor flows as a percentage of total employment (Figure 3). Hires in the first quarter of 2000 were 25 percent of total employment, but were only 16.9 percent in the third quarter of 2013. This is nearly a 48 percent drop in the percent of hires. Nevertheless, the percentage of hires has been increasing since the low point of 14.1 percent that occurred in the third quarter of 2009.

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Why has the Utah labor market become less dynamic over time? The two recessions that began in March 2001 and December 2007 led to large declines in labor market dynamism, but each recession’s recovery has not returned the labor market to the levels found in 2000. Recent research by Hyatt and Spletzer, economists at the U.S. Census Bureau, finds that the decline in gross worker flows is primarily due to the decline in the number of short duration jobs (less than three months) and a lower level of job-to-job flows. In other words, firms appear to be offering few short duration positions and workers are tending to stay in their jobs longer once they find employment.

Is the decline in employment dynamics an indication of a poorly performing labor market? Hyatt and Spletzer say it all depends on the reason for the declines. If increased adjustment costs, increased uncertainty, or the loss of short-term employment that helps transition young workers into other jobs are the reasons, then the decline in dynamism would be viewed in a negative light. However, if increased quality of job matches, increased educational attainment (which is associated with more stable employment), or increased wages are the reasons, the lower level of employment dynamics would reflect a positive development in the labor market. Whether the decline was caused by good or bad factors was left unanswered because it was beyond the scope of their research.

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Thursday, August 28, 2014

A Closer Look at the 100,000 Jobs in 1,000 Days

Tyson Smith, Regional Economist

In November of 2011, the Governor and the Governor’s Office of Management and Budget (GOMB) estimated that Utah’s economy could grow fast enough to create 100,000 jobs in 1,000 days. Last week, Governor Herbert announced that over the 32 month period, Utah exceeded the goal, and added 112,200 new jobs.

To better understand the impact of adding over 100,000 new jobs, it is necessary to understand the data source used by GOMB to estimate the employment growth. Each month, the U.S. Bureau of Labor Statistics (BLS) collects employment information from businesses through the Current Employment Statistics (CES) program. BLS uses the survey results to model employment totals at the state level. This process introduces significant survey error, which is why the CES employment totals are benchmarked annually to more accurate sources that come in later (BLS’ Quarterly Census of Employment and Wages [QCEW]). For the 1,000 day goal, GOMB used Utah’s seasonally adjusted CES estimates as the barometer for Utah’s employment gains, as they provide the most timely employment estimate available (as discussed here and here). The actual count of jobs over that period is yet to come through the QCEW data, but we do not anticipate it altering the outcome.

Let’s take a closer look at the data and discuss the progress in Utah’s labor market over the 1,000 days.

The following chart shows that total state employment has actually been accelerating since early 2010, over a year before the trigger point. The labor market grew 4 percent from February 2010 – the employment nadir – to November 2011 – the starting point for the 1,000 days. During that period, the economy added approximately 2,200 jobs per month, which equates to a monthly growth rate of 0.2 percent. The Utah economy accelerated even more in the six months prior to November 2011, adding around 2,900 jobs per month. After November 2011, the number of new jobs added to the economy continued to increase to a monthly average of roughly 3,600 new jobs per month – a monthly growth rate of 0.3 percent.

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The image below highlights the number of jobs added to each industry according to the CES. Trade, transportation and utilities (the largest industry) added the most employees, while construction (the industry hardest hit by the recession) experienced the largest percentage increase over the 1,000 days. The overall 100,000 job gain was nicely spread across all of Utah’s industrial sectors, which each largely growing in proportion to is size.

  • Mining and Logging: added 600 jobs (5.0 percent)
  • Information: added 4,000 jobs (13.2 percent)
  • Other Services: added 3,200 jobs (9.3 percent)
  • Construction: added 13,800 jobs (20.8 percent)
  • Manufacturing: added 8,600 jobs (7.5 percent)
  • Leisure and Hospitality: added 15,000 jobs (13.2 percent)
  • Education and Health Services: added 16,600 jobs (10.4 percent)
  • Professional and Business Services: added 16,200 jobs (9.9 percent)
  • Government: added 10,200 jobs (4.6 percent)
  • Trade, Transportation, Utilities: added 19,300 jobs (8.2 percent)
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Thursday, August 21, 2014

Income Pyramids

Mark Knold,  Supervising Economist

The Workforce Research and Analysis unit here at Workforce Services desires to be responsive to data requests that come our way. We try to anticipate what labor statistics/economics/demographics data are pertinent to an area, and we post tables, charts, and graphs on our website to make this available. But a recent request from one of Utah’s legislators asking for a wage pyramid for his area caught my eye. It turned out to be a simple procedure and analysis, and one I wish to share.

Individual wage data can’t be extracted from the data that DWS is proprietary to. There is nowhere one can go to get a list of everyone’s wages who live in a specified area. But a powerful substitute can be found in the U.S. Census Bureau’s American Community Survey (ACS). A household income estimate is available for each county, and this can be compartmentalized and stacked as a pyramid.

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