Category Archives: Workforce

Blue-Collar Worker Shortages: Navigating a Business Environment of Higher Labor Costs

Source: Gad Levanon, Frank Steemers, The Conference Board, December 2018
(subscription required)

From the abstract:
The threat of labor shortages is more acute in blue-collar and low-pay services occupations than in more highly educated white-collar occupations, the exact opposite of the prevailing trends in recent decades. We expect that by the end of 2019, the labor market will be historically tight. Industries that employ large shares of blue-collar workers, such as agriculture, mining, utilities, construction, manufacturing, transportation, accommodation and food services, repair, maintenance, and personal care services, are strongly affected by rising wages and shrinking supply. While the labor white-collar market is also tight, wage growth for the 40 percent of workers in management, professional, and related occupations is slow to accelerate. Sales and office workers, most of whom do not have a bachelor’s degree, are in shorter supply than management and professional workers.

Related:
Blue Collar Worker Shortage Turns U.S. Labor Market on Its Head
Source: Rich Miller, Bloomberg, December 13, 2018

Investing in America’s Workforce: Improving Outcomes for Workers and Employers

Source: Editors: Stuart Andreason, Todd Greene, Heath Prince, Carl E. Van Horn, W.E. Upjohn Institute for Employment Research, 2018

How can well-structured and effective workforce programs and policies result in better economic outcomes for individuals, businesses, and communities?

Explore contemporary research, best practices, and resources from more than 100 authors in the book Investing in America’s Workforce: Improving Outcomes for Workers and Employers.

The book is divided into three volumes: Investing in Workers, Investing in Work, and Investing in Systems for Employment Opportunity. Within each volume are discrete sections made up of chapters that identify specific workforce development programs and policies that provide positive returns to society, to employers, and to job seekers. Download the three volumes and individual chapters below.

Note: The policies and practices presented in the book are intended to spur innovative thinking that results in context-specific solutions. The perspectives are not intended as an endorsement from the Federal Reserve System or its partnering institutions.

VOLUME 1: INVESTING IN WORKERS
Front Matter and Table of Contents
Acknowledgments
Foreword: The Evolving U.S. Labor Market by Patrick T. Harker
Introduction: Investing in America’s Workforce by Stuart Andreason, Todd Greene, Heath Prince, and Carl E. Van Horn

– Building Employer Investment in Workforce Development
– Investing in Undervalued Human Capital
– Investing in Historically Black Colleges and Universities
– Investing in Workers with Different Abilities
– Investing in Workers of the Future

VOLUME 2: INVESTING IN WORK
Front Matter and Table of Contents
Introduction: Investing in Work by Prabal Chakrabarti and Jeffrey Fuhrer

– Investing in Opportunities to Create Good Jobs
– Investing in Work and Wealth
– Investing in Rural Work
– Investing in Human Capital to Support Local Economic Development

VOLUME 3: INVESTING IN SYSTEMS FOR EMPLOYMENT OPPORTUNITY
Front Matter and Table of Contents
Introduction: Investing in Systems for Employment Opportunity by Stuart Andreason and Alexander Ruder

– Financial Innovations in Workforce Development
– Government Investment in Workforce Development
– Investing in Technology
– Investing in Skills and Credentials
– Investing in Regional Workforce Development Systems
– Appendix: Investing in America’s Workforce

Why Aren’t U.S. Workers Working?

Source: Mary C. Daly, Joseph H. Pedtke, Nicolas Petrosky-Nadeau, and Annemarie Schweinert, Federal Reserve Bank of San Francisco, FRBSF Economic Letter, 2018-24, November 13, 2018

Labor force participation among U.S. men and women ages 25 to 54 has been declining for nearly 20 years, a stark contrast with rising participation in Canada over this period. Three-fourths of the difference between the two countries can be explained by the growing gap in labor force attachment of women. A key factor is the extensive parental leave policies in Canada. If the United States could reverse the trend in participation of prime-age women to match Canada, it would see 5 million additional prime-age workers join the labor force.

The decline in labor force participation of U.S. men and women ages 25 to 54 stands in stark contrast with other industrialized nations, where participation rates for prime-age workers have increased over time. In this Economic Letter, we show how labor force participation rates have diverged for men and women in the United States and Canada. We find that three-fourths of the difference in participation between the two countries can be explained by the growing gap in labor force attachment of women. We discuss how employment and social policies in Canada have made it easier for women to remain in the labor force while raising children. Our findings suggest that policy interventions to reduce the structural barriers that keep many women on the sidelines could bring millions of prime-age Americans into the labor force.

Regional Impacts of a Minimum Wage Hike: A Pennsylvania Case Study

Source: Shannon Brobst, Regional Financial Review, May 2018
(subscription required)

Eighteen U.S. states and 20 cities rang in 2018 with increases in their minimum wage, bringing back into the spotlight the debate about whether to raise the federal minimum, which has remained at $7.25 since 2009 (see Chart 1). The question of whether it should be increased receives many different answers from Republicans, Democrats, economists and non-professional observers. Some argue that increasing the cost of labor hurts the economy because it could lead to jobs cuts for low-paid workers. Raising the minimum wage increases businesses’ labor costs, and thus, the cost of producing a good or service. Higher production costs may cause employers to lay off workers in order to contain costs and remain profitable, and could cause marginally profitable small or struggling businesses to close. Others counter this argument stating that a higher minimum wage helps the economy by boosting incomes and does not materially affect employment. This paper examines the positive and negative effects of raising the minimum wage from $7.25 to $12 and $15 in Pennsylvania and discusses policy implications at the local and federal levels.

Are Reemployment Services Effective? Experimental Evidence from the Great Recession

Source: Marios Michaelides, Peter Mueser, Journal of Policy Analysis and Management, Volume 37, Issue 3, Summer 2018
(subscription required)

From the abstract:
We examine an experimental‐design reemployment program implemented in Nevada during the Great Recession that required Unemployment Insurance (UI) recipients to: (1) undergo an eligibility review to confirm they were qualified for benefits and actively searching for work and, if deemed eligible, (2) receive job‐counseling services. Our results show that the program expedited participant exit from UI, produced UI savings that exceeded program costs, and improved participant employment outcomes. Analyses of program effects on the UI exit likelihood show that the program’s effects are partly associated with increased participant exit up through the time when program activities were scheduled, reflecting voluntary exit of participants from UI to avoid program activities and disqualifications of participants who failed to meet eligibility requirements. In addition, the program induced substantial participant exit from UI in the period after participants fulfilled requirements and their interactions with the program had ended, suggesting that the job‐counseling services offered by the program may have helped participants to conduct more effective job searches. Our findings provide evidence that reemployment programs that combine an eligibility review with mandatory participation in job‐search services can be effective during recessions.

Great Recession, great recovery? Trends from the Current Population Survey

Source: Evan Cunningham, Monthly Labor Review, April 2018

This article uses data from the Current Population Survey to examine the state of the U.S. labor market 10 years after the start of the Great Recession of 2007–09. By December 2017, unemployment rates had returned to prerecession lows for people of all ages, genders, major race and ethnicity groups, and levels of educational attainment. However, the long-term decline in labor force participation continued during this recovery, while long-term unemployment and involuntary part-time employment remained elevated.

State and Local Government Workforce: 2018 Data and 10 Year Trends

Source: Gerald Young, Center for State and Local Government Excellence, International Public Management Association for Human Resources, and the National Association of State Personnel Executives, May 2018

From the summary:
Since 2009, the Center for State and Local Government Excellence has partnered with the International Public Management Association for Human Resources and the National Association of State Personnel Executives to conduct a study on state and local workforce issues. This year’s report contains both 2018 data on emerging issues like the gig economy and flexible work practices and longitudinal data on recruiting challenges, retirement plan or health benefit changes, hiring, and separations from service.

Automation, skills use and training

Source: Ljubica Nedelkoska, Glenda Quintini, Organisation for Economic Co-operation and Development, OECD Social, Employment and Migration Working Papers, No. 202, OECD Publishing, 2018

From the abstract:
This study focuses on the risk of automation and its interaction with training and the use of skills at work. Building on the expert assessment carried out by Carl Frey and Michael Osborne in 2013, the paper estimates the risk of automation for individual jobs based on the Survey of Adult Skills (PIAAC). The analysis improves on other international estimates of the individual risk of automation by using a more disaggregated occupational classification and identifying the same automation bottlenecks emerging from the experts’ discussion. Hence, it more closely aligns to the initial assessment of the potential automation deriving from the development of Machine Learning. Furthermore, this study investigates the same methodology using national data from Germany and United Kingdom, providing insights into the robustness of the results. The risk of automation is estimated for the 32 OECD countries that have participated in the Survey of Adult Skills (PIAAC) so far. Beyond the share of jobs likely to be significantly disrupted by automation of production and services, the accent is put on characteristics of these jobs and the characteristics of the workers who hold them. The risk is also assessed against the use of ICT at work and the role of training in helping workers transit to new career opportunities.

Related:
A study finds nearly half of jobs are vulnerable to automation
Source: The Economist, April 24, 2018

A WAVE of automation anxiety has hit the West. Just try typing “Will machines…” into Google. An algorithm offers to complete the sentence with differing degrees of disquiet: “…take my job?”; “…take all jobs?”; “…replace humans?”; “…take over the world?” 

Job-grabbing robots are no longer science fiction. In 2013 Carl Benedikt Frey and Michael Osborne of Oxford University used—what else?—a machine-learning algorithm to assess how easily 702 different kinds of job in America could be automated. They concluded that fully 47% could be done by machines “over the next decade or two”.

A new working paper by the OECD, a club of mostly rich countries, employs a similar approach, looking at other developed economies. Its technique differs from Mr Frey and Mr Osborne’s study by assessing the automatability of each task within a given job, based on a survey of skills in 2015. Overall, the study finds that 14% of jobs across 32 countries are highly vulnerable, defined as having at least a 70% chance of automation. A further 32% were slightly less imperilled, with a probability between 50% and 70%. At current employment rates, that puts 210m jobs at risk across the 32 countries in the study.

Registered Apprenticeship: Federal Role and Recent Federal Efforts

Source: Benjamin Collins, Congressional Research Service, CRS Report, R45171, April 20, 2018

Apprenticeship is a workforce development strategy that trains a worker for a specific occupation using a structured combination of paid on-the-job training and related instruction. Increased costs for higher education and possible mismatches between worker skills and employer needs have led to interest in alternative workforce development strategies such as apprenticeship. ….

…. To register an apprenticeship, a sponsor (an employer, union, industry group, or other eligible entity) submits an application to the applicable registration agency (either DOL or the appropriate SAA). The application must include a work process schedule that describes the competencies that the apprentice will learn and how on-the-job training and related instruction will teach those competencies. The application must also include a schedule of wage increases for the apprentice, a description of safety measures, and various assurances related to program administration and recordkeeping. ….

….. In recent years, the federal government has supplemented its typical registration activities with competitive grants to support the expansion of registered apprenticeship. These grants have gone predominantly to states and other intermediaries to support apprenticeship expansion through partnerships with apprenticeship sponsors.

While registered apprenticeship sponsors do not necessarily qualify for federal funding, several education and workforce programs have identified apprenticeship as an eligible use of funds. For example, some veterans may qualify to receive GI Bill benefits while participating in a registered apprenticeship and registered apprenticeships are eligible for federal workforce development funds through the Workforce Innovation and Opportunity Act (WIOA). …..

…. This report discusses federal efforts related to apprenticeship. It begins by describing the long-established federal role in certifying apprenticeships programs through the registered apprenticeship system. It then discusses more recent federal efforts to support apprenticeship expansion. The appendix of the report discusses federal funding streams that focus on other human capital development strategies but can support apprenticeship in certain circumstances. …..