Career Tech January 28, Chad Wilkerson

Transcription

1 Career Tech January 28, 2014 Chad Wilkerson Vice President, Economist, and Oklahoma City Branch Executive Federal Reserve Bank of Kansas City

2 The Fed and Overall U.S. Employment Trends

3 Overview of the Federal Reserve System The Fed consists of three main entities: Board of Governors: 7 members appointed by U.S. President Federal Reserve Banks: 12 total; semi-independent by design Federal Open Market Committee: 19 members; 12 voting As with most central banks, the Fed s primary responsibilities fall within four general areas: Lender of last resort provide liquidity in times of crisis Monetary policy promote full employment and low inflation Bank regulation ensure safety and soundness of banks Financial services bank for banks, bank for federal govt.

4 Federal Reserve Districts and Office Locations

5 The Oklahoma City Branch of the Federal Reserve Bank of Kansas City Functions 40 staff Research on U.S. and Oklahoma economies Economic and financial education outreach Examinations of Oklahoma financial institutions 2014 board of directors Jim Dunn (chair), Chairman, Mill Creek Lumber & Supply, Tulsa Clint Abernathy, Owner, Abernathy Farms, Inc., Altus Paula Bryant-Ellis, COO, BOK Financial Mortgage Group, Tulsa Linda Capps, Vice Chairman, Citizen Potawatomi Nation, Shawnee Michael Coffman, CEO, Panhandle Oil & Gas, Inc., Oklahoma City Pete Delaney, Chairman & CEO, OGE Energy Corp., Oklahoma City Charles Hall, Chairman & CEO, Exchange Bank & Trust Co., Perry

6 U.S. employment has grown moderately since 2010, after plummeting in U.S. Payroll Employment 600 Change from previous month, thousands Index Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Source: Bureau of Labor Statistics

7 And U.S. unemployment could return to the normal range by 2015 Unemployment Rate Seasonally Adjusted 12 Percent Dec. FOMC Forecast Ranges in Yellow Long Term Sources: U.S. Bureau of Labor Statistics, FOMC

8 However, falling participation in the labor force is a key reason for the improvement Source: Bureau of Labor Statistics

9 With inflation low, most Fed officials expect no change in rates until Percent Federal Funds Rate Year-end target Long Term 8 6 Dec. FOMC Forecast Ranges in Yellow 6 4 (12) (3) 4 2 (2) Note Number of participants who project the initial increase will occur in the specified year in parenthesis Sources: Federal Reserve Board, FOMC

10 Oklahoma Employment: Overall, and By Industry

11 Employment trends within Oklahoma have varied considerably the past 5 years Level of Payroll Employment Through November Index: Jan-08= OKC Metro Rest of OK U.S Tulsa Metro Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan Source: U.S. Bureau of Labor Statistics

12 But unemployment rate trends have not diverged much from one another 12 Percent Unemployment Rates Seasonally Adjusted U.S. OKC Metro Rest of OK Tulsa Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 Source: U.S. Bureau of Labor Statistics

13 That s because labor force (i.e., population) changes have tracked employment trends 110 Index: Nov-08=100 Number of People in the Labor Force Seasonally Adjusted U.S. OKC Metro Rest of OK Tulsa Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 Source: U.S. Bureau of Labor Statistics

14 In 2013, energy jobs fell across the state, but hospitality and professional jobs rose Oklahoma Job Growth by Industry Nov-13 8 Percent change year-over-year OKC Tulsa Rest of OK Total Constr. Hospitality Trade & Transp. State & Local Govt. Edc. & Health Finance Prof. & Bus. Services Mfg. Energy Fed. Govt Source: Bureau of Labor Statistics

15 Oklahoma City grew despite its two most important industries suffering declines Oklahoma City Metro and U.S. Employment Share by Industry 2012 Percent of Total Employment Industry OKC Metro U.S. Location Quotient Federal Government Natural Resources & Mining State & Local Government Construction Leisure & Hospitality Financial Activities Education & Health Professional and Business Services Trade, Transportation & Utilities Information Manufacturing Note - Location quotient is the division of local employment share by national employment share Source: U.S. Bureau of Labor Statistics

16 In non-metro Oklahoma, energy is even bigger, and more field work than office Rest of OK and U.S. Employment Share by Industry 2012 Percent of Total Employment Industry Rest of OK U.S. Location Quotient Natural Resources & Mining State & Local Govt Federal Govt Mfg Trade, Transp & Utilities Construction Education & Health Leisure & Hospitality Financial Activities Prof and Bus Services Info Note - Location quotient is the division of local employment share by national employment share Source: U.S. Bureau of Labor Statistics

17 Energy is also important in Tulsa, but the city is generally more diversified Tulsa Metro and U.S. Employment Share by Industry 2012 Percent of Total Employment Industry Tulsa Metro U.S. Location Quotient Manufacturing Natural Resources & Mining Construction Education & Health Trade, Transportation & Utilities Professional and Business Services Financial Activities Information State & Local Government Leisure & Hospitality Federal Government Note - Location quotient is the division of local employment share by national employment share Source: U.S. Bureau of Labor Statistics

18 U.S. and OKC Employment by Education and Pay

19 Generally speaking, higher education has (much) lower unemployment and higher pay U.S. Earnings and Unemployment Rates by Educational Attainment Unemployment Rate in 2012 (percent) Median Weekly Earnings in 2012 ($) 2.5 Doctoral degree $1, Professional degree $1, Master's degree $1, Bachelor's degree $1, Associate's degree $ Some college, no degree $ High school diploma $ Less than a high school diploma $471 Source: U.S. Bureau of Labor Statistics

20 Source: FRBKC But educational attainment does not always match up with the skills required for jobs U.S. Employment Shares of Workers by Level of Education, 2012 Percent Low-skill jobs Middle-skill jobs High-skill jobs Less than High School High School Diploma Some College or Associate's Bachelor's Degree or Higher

21 Over the past decade, U.S. jobs requiring higher education have generally grown faster 2.5 Annual Employment Growth by Education/Training Required for Jobs Percent Total, All Occupations Less than high school -0.2 High school diploma Associate's degree or vocational award Bachelor's degree Graduate or professional degree Source: Bureau of Labor Statistics

22 In OKC, high education jobs grew fastest, but jobs requiring little or no education also thrived Annual Employment Growth by Education/Training Required for Jobs Percent U.S. Actual OKC Metro Total, All Occupations Less than high school -0.2 High school diploma Associate's degree or vocational award Bachelor's degree Graduate or professional degree Source: Bureau of Labor Statistics

23 Energy-related jobs made up a sizable portion of fast-growing, low education OKC jobs Examples of OKC metro jobs requiring high school education or less, that grew more than 100 percent from Education required Jobs Added Roustabouts, Oil and Gas Less than high school 900 Legal Secretaries High school diploma or equivalent 800 Rotary Drill Operators, Oil and Gas Less than high school 550 Derrick Operators, Oil and Gas Less than high school 520 Electrical and Electronic Equipment Assemblers High school diploma or equivalent 410 Surveying and Mapping Technicians High school diploma or equivalent 250 Pipelayers High school diploma or equivalent 240 Source: U.S. Bureau of Labor Statistics

24 Looking at pay, back in 2002 the U.S. was expected to have job polarization, and it did 2.5 Percent Annual Employment Growth by Average Pay of Occupations U.S. Projected U.S. Actual OKC Metro Total, All Occupations Bottom quintile (<$20K in 2002) 2nd-lowest quintile ($20-24K in 2002) Middle quintile ($24-32K in 2002) 2nd-highest quintile ($32-47K in 2002) Top quintile (>$47K in 2002) Source: Bureau of Labor Statistics

25 OKC also had job polarization actually about what was predicted but less than the nation Percent Annual Employment Growth by Average Pay of Occupations U.S. Projected U.S. Actual OKC Metro Total, All Occupations Bottom quintile (<$20K in 2002) 2nd-lowest quintile ($20-24K in 2002) Middle quintile ($24-32K in 2002) 2nd-highest quintile ($32-47K in 2002) Top quintile (>$47K in 2002) Source: Bureau of Labor Statistics

26 Which types of jobs have grown and declined ---and are expected to grow and decline? Growing jobs generally require: Expert thinking/problem-solving and/or Complex communication/interaction Declining jobs generally can be: Automated (routine/rules-based) and/or Done more cheaply overseas Source: Levy & Murnane

27 OKC high-paying technical jobs have grown markedly, but so have low-paying service jobs Fast-growing (>3% annual >500 jobs added) OKC Metro Jobs, Jobs Education required Added High-paying (> $60k) Lawyers Doctoral or professional degree 1170 Computer and Information Systems Managers Bachelor's degree 580 Petroleum Engineers Bachelor's degree 1640 Software Developers Bachelor's degree 1120 Mechanical Engineers Bachelor's degree 580 Sales Representatives, Technical and Scientific Products Bachelor's degree 1350 First-Line Supervisors of Construction Trades and Extraction Workers High school diploma or equivalent 1330 Low-paying (< $25k) Laundry and Dry-Cleaning Workers Less than high school 610 Childcare Workers High school diploma or equivalent 850 Food Preparation Workers Less than high school 1700 Personal Care Aides Less than high school 3110 Counter Attendants, Cafeteria, Food Concession, and Coffee Shop Less than high school 670 Dishwashers Less than high school 860 Source: Bureau of Labor Statistics

28 Mid-paying, fast-declining jobs in OKC were mostly routine or rule-based in nature Fast-declining(>-3% annual >500 jobs lost), Mid-paying($25-60K) OKC Metro Jobs, Minimum education required Jobs Lost Telecommunications Equipment and Line Installers and Repairers High school diploma or equivalent Construction and Building Inspectors High school diploma or equivalent -630 Executive Secretaries and Executive Administrative Assistants High school diploma or equivalent Computer Operators High school diploma or equivalent -830 Lathe & Turning Machine Tool Setters, Operators, & Tenders, Metal & Plastic High school diploma or equivalent Word Processors and Typists High school diploma or equivalent -540 Data Entry Keyers High school diploma or equivalent -690 Telemarketers Less than high school Switchboard Operators, Including Answering Service High school diploma or equivalent -530 File Clerks High school diploma or equivalent -560 Source: Bureau of Labor Statistics

29 The stronger relative growth of mid-paying jobs in OKC helped close the pay gap with the U.S. 0 Percent Average Pay Gap of Occupations, OKC Metro vs. U.S. By Pay Quintile Total, All Occupations Bottom quintile (<$22K) 2nd-lowest quintile ($22-30K) Middle quintile ($30K-40K) 2nd-highest quintile ($40K-60K) Top quintile (>$60K) Source: Bureau of Labor Statistics

30 Heading forward, some degree of job polarization is expected to continue 1.8 Projected Intermediate-Term U.S. Job Growth by Average Pay, Projections Annual Percent Growth Total, All Occupations Bottom quintile 2nd-lowest quintile Middle quintile 2nd-highest quintile Top quintile Source: Bureau of Labor Statistics

31 Faster job growth for higher education jobs is generally expected to continue in the U.S. 2.5 Percent Projected Intermediate-Term U.S. Job Growth by Education/Training, Projections Total, All Occupations Less than high school High school diploma Associate's degree or vocational award Bachelor's degree Graduate or professional degree Source: Bureau of Labor Statistics

32 Oklahoma City s educational attainment is actually quite similar to the nation as a whole 60 Percent Educational Attainment, 2012 Population 25 years and up United States OKC Metro Less than HS diploma High school diploma Associate's degree Bachelor's degree Grad/prof degree Source: Bureau of Labor Statistics

33 But we lag behind most other major metros, ranking in the bottom fourth of the 50 largest Educational Attainment of 50 Most Populous Metropolitan Areas: 2010 Percent bachelor's degree or higher 1 Washington, DC San Jose, CA San Francisco, CA Boston, MA Raleigh, NC Austin, TX Denver, CO Minneapolis, MN Seattle, WA New York, NY OKLAHOMA CITY Detroit, MI Phoenix, AZ Jacksonville, FL New Orleans, LA Birmingham, AL Tampa, FL Louisville, KY San Antonio, TX Memphis, TN Las Vegas, NV Riverside, CA 19.5 Source: U.S. Bureau of Labor Statistics

34 Interestingly, OKC (like the U.S.) generally has more education than currently required 60 Percent Educational attainment vs. requirements of jobs held OKC metro, Educational attainment OKC Requirements Metro of jobs Less than high school High school diploma Associate's degree or vocational award Bachelor's degree Graduate or professional degree Source: Bureau of Labor Statistics

35 How can OKC increase educational attainment in ways to improve its long-term prospects? Improve local educational attainment with an eye towards future needed skills Attract high-skilled U.S. workers via: Continued improved quality of life Continued productivity gains from clusters Willingness to adapt to changing technology Attract high-skilled workers from elsewhere in the world via: Same ways as for domestic workers Immigration reform for high skilled workers Source: Bureau of Labor Statistics

36 Summary U.S. labor market are improving but have not yet returned to normal In Oklahoma, recent employment trends have varied by region, industry, and education There has been less job polarization in the OKC metro, and the pay gap has narrowed Educational attainment in OKC lags most big metros and will need to adjust to match jobs