The Current and Future Direction of the State and Lane County Economies

1
The Current and Future Direction of the State
and Lane County Economies

• Lane Workforce Partnership
• Board of Directors Planning Session
• December 10, 2009
• Graham Slater and Brian Rooney

2
Overview

• We are where we are the impact of recession
• Where are we headed? current forecasts and
  projections
• What skills are needed for high-wage jobs?
• Do we invest training resources for specific jobs
  or for skills?
• How will the economy be different in the short
  and long term?

3
We Are Where We AreThe Recessions Impact
4
In September and October, Oregons unemployment
rate stood at 11.3, the lowest rate since
February (but still horribly high by historical
standards).
5
The number of unemployed has dropped 9 since its
peak in May.
222,031
6
Oregons previously rapid labor force growth
seems to have eased off.
We need to add about 2,000 jobs each month, just
to keep pace with labor force growth. Weve only
done that three times in the last 23 months.
7
The pace of job losses has definitely eased.

• Down 20 of the past 22 months
• Average job losses May to October 3,300.

8
Almost 130,000 private sector jobs have been
lost.
9
The Recession At A Glance
10
The Recessions Impact in Lane County
11
Lane Countys September and October unemployment
rate stood at 12 percent, down from a high of 14
percent in May.
12
Monthly job change variable since April, but
losses definitely slowing.

• Down17 of the last 22 months.
• Average loss April to October 514

13
About 10,500 jobs lost in Lane County since
October 2007.
14
A recession that started in manufacturing and
construction has now negatively affected most
industry sectors.
0.0
-29.3
-21.4
0.0
-5.0
-5.1
-4.8
-7.8
5.2
-4.0
1.4
0.0
15
Where Are We Headed?Current Projections and
Forecasts
16
Where do we go from here? Job losses continue
until the first quarter of 2010 we dont regain
pre-recession employment levels until 3nd quarter
of 2013.
17
Where do we go from here?
18
Where do we go from here?
19
Oregon grows slowly between 2008 and 2018.

• We expect 9 growth in employment from 2008 to
  2018
• more than 160,000 job openings due to growth
• close to the 10 rate for 1998-2008
• slower than in most historical 10-year periods
• health care job growth related to growing and
  ageing population
• otherwise assumes lack of engine of growth that
  drove rapid expansion in the 1970s and 1990s
• we have to dig out of this recession hole to even
  get back to 2008 levels

20
For the first time ever, we project that
manufacturing will lose jobs over the ten-year
period.
21
But manufacturings trend actually reflects
growth from these recessionary levels.
22
Services industries will add many jobs,
especially in the health care arena.
23
Manufacturing industries are facing the most
losses.
24
But its not just about the growth openings.
Workforce and training entities are also
concerned with replacement openings.

• More than 430,000 openings during the decade to
  replace current workers as they
• change occupations early in their careers,
• or retire baby boomers are nearing retirement
• More than 160,000 openings due to economic
  growth.
• So in total about 600,000 occupational
  openings
• This doesnt include job openings due to people
  changing jobs but not their occupations.

25
Health care occupations will definitely lead the
growth.
26
For every opening due to growth, we expect 2.6
due to replacement needs.
27
The occupational mix hardly changes at all during
the decade.
28
Where Is Region 5 Headed?Current Projections
and Forecasts
29
Forecast for 2008 2018 includes losses in 2009,
then rebound.

• 10 growth is slower than the average ten-year
  span in Region 5 of 31 (although 15 is more
  typical in recent years).

30
Region 5 similar to statewide except more growth
in government and less in construction.
31
Like statewide, services, especially health care,
add many jobs in Region 5.

• Computer and electronics products is positive
  for Region 5.

32
A very small number of industries are projected
to decline in Region 5

• Compared to the statewide forecast
• computer and electronic manufacturing is not
  negative locally
• paper is confidential locally
• primary metals very small locally
• federal government flat.

33
Health care occupations lead Region 5s growth.
34
All occupational sectors have more replacement
openings than growth openings except health care.

• Roughly 7,900 out of 9,600 openings (82) in
  blue collar occupations are replacement
  openings in Region 5.

Blue Collar
35
Tell Us More About the New Jobs Their Wages,
Education Requirements, Skills
36
On-the-job training will remain the primary
minimum training requirement.
37
Many job openings are for high- or medium-wage
occupations but those require more education.
38
Were always striving to add high-wage jobs. But
in reality, occupations with the most job
openings often pay lower wages.
39
Lane County New Jobs Their Wages, Education
Requirements and Skills
40
Similar to the state, on-the-job training and
then a bachelors degree are the primary
minimum training requirements.
41
Lane County has more high and medium wage
jobs than low.
42
In Lane County as elsewhere, education pays.
43
In Lane County, occupational groups offering high
wages are higher in rank (compared with
statewide).

• Professional and related is ranked 2nd compared
  to 3rd statewide.
• Health care is ranked 6th compared to 8th
  statewide.

44
Lets look at the skills needed for low-
45
medium-, and
46
high-wage occupations.
47
Top 20 high-wage, high-demand occupations for
Region 5
48
Should We Invest In Training For Specific Jobs
or For Skills?
49
Healthcare occupations top the list of
occupations needing the most training in Lane
County.
Sometimes, you train for particular occupations.
Which ones? Use OP4T!
50
Sometimes, you train for specific skills--
Basic skills -- General skills -- Skills to
transfer between occupations For example,
these occupations have skills similar to
Registered Nurse
51
And these are similar to Welders, Cutters,
Solderers, and Brazers
52
And Automotive Service Technicians and Mechanics
53
Is There A New Normal?
54
Probable and possible long-term changes in Region
5

• Infrastructure for a state mental facility and
  possible prison in Junction City area, providing
  high-paying stable employment in the area.
• Likely employment in the solar industry Unichem
  and Grape Solar.
• RV manufacturing likely to retain some jobs in
  Lane County. But we compete with other areas
  including Elkhart, IN.
• Wood products lean manufacturing, long-term
  employment, sufficient transportation, lots of
  trees.

55
Probable and possible long-term changes in Region
5

• Housing market will return, but still a long way
  to go due to high inventories. Addition of
  high-paying jobs will help.
• Population will likely continue to increase.
  Oregon remains popular with retirees.
• The university will remain a stabilizing force in
  the economy.

56
For copies of this presentation, go to
www.QualityInfo.org, click on Contact Us,
search for my name.Brian Rooney, Regional
Economist(541) 686-7703Brian.T.Rooney_at_state.or.u
sGraham Slater, Research Administrator(503)
947-1212Graham.J.Slater_at_state.or.us
57
The Importance of Unemployment Insurance in Lane
County

• We expect to pay 250 million to 270 million in
  UI benefits this year.
• If this were an industry payroll, it would rank
  between 2nd and 4th among 80 industries in Lane
  County
• Total payroll in Lane Countys state government,
  including the university was 294 million.
• Total payroll for Lane Countys ambulatory health
  care services 364 million.
• Total payroll at Lane Countys wood products
  manufacturing 176 million.
• Quarterly Census of Employment and Wages 2008
  annual totals three-digit North American
  Industry Classification Series industry levels.

58
The importance of Unemployment Insurance.

• We expect to pay 2.5 billion to 3.0 billion in
  UI benefits this year.
• If this were an industry payroll, it would rank
  between 3rd and 5th among the 84 industries in
  Oregon.
• Total payroll for Oregons private hospitals was
  2.8 billion in 2008.
• Total payroll for Oregons special trades
  contractors roofers, electricians, plumbers
  was 2.6 billion.
• Total payroll for all of Oregon State Government,
  including the university system, was 2.6
  billion.
• Quarterly Census of Employment and Wages 2008
  annual totals three-digit North American
  Industry Classification Series industry levels.

59
By the way, while its easy to focus on the doom
and gloom right now, if we take the long-term
view, Oregons had a pretty great track record of
creating jobs.
60
Top 20 high-wage occupations for Region 5
61
Are green jobs part of the new normal?

• For our survey, a green job is one that provides
  a service or produces a product in any of the
  following categories
• Increasing energy efficiency
• Producing renewable energy
• Preventing, reducing, or mitigating environmental
  degradation
• Cleaning up and restoring the natural environment
• Providing education, consulting, policy
  promotion, accreditation, trading and offsets, or
  similar services supporting any of the other
  categories
• Note we wanted one or more of these things to be
  an essential function of the job.

62
Key Finding Oregon has roughly 50,000 green jobs.

• 51,402 green jobs in 2008, spread across...
• 5,025 employers
• all major industry groups
• 226 different occupations
• Represents about 3 percent of the employment in
  the private sector and state and local government
• To give perspective this is roughly the same as
  the number of employees working in Oregons
  private hospitals.

63
Construction, wholesale and retail trade, and
administrative and waste services account for
about half of Oregons green jobs.
64
Key Finding Many green jobs are in blue collar
occupations.
65
Eleven occupations had at least 1,000 green jobs.
66
Key Finding On average, green jobs tended
toward slightly higher wages than jobs across the
entire economy.

• Average wage for all jobs 19.92 per hour
• Average wage for green jobs 22.61 per hour
• Half of all jobs pay 15.22 or more per hour
• About 2/3 of all green jobs pay 15.00 or more
  per hour
• Occupation mix explains some of the difference,
  but not all

67
Key Finding Two-thirds of green jobs require no
education beyond high school.
68
Key Finding About one-third of green jobs
require some kind of special license /
certificate.

• Some jobs have more than one special requirement.

69
Key Finding Almost two-thirds (32,746) of
Oregons green jobs meet the states criteria for
high wage.