New England Regional Labor Force Developments and Their Workforce Development Implications Andrew Sum Center for Labor Market Studies Northeastern University.

New England Regional Labor Force Developments and Their Workforce Development

Implications

Andrew SumCenter for Labor Market Studies

Northeastern University

New England Labor Force Developments, 2000-2005 and the Future Growth Outlook:

Implications for the Region’s Workforce Development System

1. The New England labor force in the 1990s; the very limited growth of the region’s labor force – second lowest among the nine geographic divisions; declines in the native born male labor force in most states

2. Regional labor force developments over the 2000-2005 period; substantial disparities in labor force growth across the six New England states; the absence of any labor force growth in Massachusetts

3. Key sources of labor force growth and decline across the region; the role of population developments and changing labor force participation behavior

4. Variations in labor force participation rate changes across gender, age, and educational attainment subgroups; key demographic groups with reduced labor force attachment

5. The future demographic outlook for New England and its labor force consequences

6. What are the implications of these findings for the New England Workforce development system

Key Labor Force Developments in New England in the 1990s Decade

1. The region’s civilian labor force grew by only 179,000 or 2.5% between 1990 and 2000; well below the national growth rate of 11.5%; our region ranked second lowest among the nine geographic regions

2. Labor force growth rates varied considerably across the six New England states, ranging from a decline of nearly 2 per cent in Connecticut to growth rates of only 1.5 to 2.0 per cent in Rhode Island and Massachusetts to highs of 10 per cent in Vermont and New Hampshire

3. The region’s male labor force was essentially stagnant in the 1990s, growing by only 18,000 and accounting for only 10% of the region’s labor force growth; the number of native born males in the labor force declined considerably; the overwhelming majority of these men were in the 20-54 age group

Growth in the Civilian Labor Force of the United States and New England, 1990 to

2000(Numbers in 1000s)

Geographic Area

(A)

1990

(B)

2000

(C)

Absolute Change

(D)

Percent Change

U.S. 123,473 137,669 14,196 11.5

New England 7,083 7,262 179 2.5

Source: 1990 and 2000 Census of Population and Housing, tabulations by authors.

Civilian Labor Force Growth Rates in the U.S. by Geographic Division, 1990 – 2000

11.5

1.82.5

9.0 9.1

12.9 13.3

16.117.0

34.5

0

5

10

15

20

25

30

35

40

U.S. MiddleAtlantic

NewEngland

East NorthCentral

Pacific West NorthCentral

East SouthCentral

SouthAtlantic

West SouthCentral

Mountain

Civilian Labor Force Growth in New England by State, 1990 – 2000 (in %)

-1.8

1.52.0

7.0

10.110.5

-4

-2

0

2

4

6

8

10

12

Connecticut Rhode Island Massachusetts Maine Vermont New Hampshire

Regional Labor Force Developments, 2000-2005

1. Nationally, the U.S. labor force has grown somewhat more slowly in past five years despite very high inflows of new immigrants. Civilian labor force grew by 6.7 million or 4.7%. In New England, the labor force increased by slightly over 202,000 or 2.8% (LAUS estimates). Our growth rate was the third lowest among the nine geographic divisions, we outpaced the East South Central region and the East North Central (Ohio, Indiana, Illinois, Michigan, Wisconsin) region of the Midwest

2. Within New England, labor force growth rates varied markedly across the six states, from 0% in Massachusetts to highs of 6% in Maine and Vermont; Massachusetts ranked third lowest in the country over the 2000-2005 period and we ranked last for the 2002-2005 period. Massachusetts is the only state in the nation to have experienced a labor force decline for three consecutive years. A combination of high levels of domestic out-migration and declining participation rates among teens, young adults, and males under 55 was responsible for the labor force decline in Massachusetts over the past 3 years

Relative Change in the Labor Force by U.S. Division 2000-2005 (in %)

4.7

10.8

7.3 7.2

5.2

3.7

3.12.8

1.4

0.7

0

2

4

6

8

10

12

U.S. Mountain SouthAtlantic

West SouthCentral

Pacific West NorthCentral

MiddleAtlantic

NewEngland

East SouthCentral

East NorthCentral

Growth Rates of the Resident Labor Force of Each New England State Between 2000 and

2005 (in %)

6.0 5.9

5.4

4.84.6

0.00

1

2

3

4

5

6

7

Vermont Maine New Hampshire Rhode Island Connecticut Massachusetts

State

Per

Cen

t

The Growth of the Massachusetts and U.S. Resident Labor Force Between Selected Time Periods, 2000 – 2005, and the State’s Ranking

Among the 50 States (in %)

Time Period

(A)

Massachusetts Growth Rates

(B)

U.S.

(C)

Massachusetts – U.S.

(D)

Massachusetts Rank Among

50 States

2000 – 2005 .0 4.7 -4.7 48th

2000 – 2002 1.7 1.6 +.1 26th (tie)

2002 – 2005 -1.7 3.1 -4.8 50th

Five States with the Highest and Lowest Growth Rates in Their Resident

Labor Force Between 2002 and 2005 (in %)

8.48.0

7.57.1 7.1

0.9 0.90.3 0.2

-1.7

-4

-2

0

2

4

6

8

10

Nevad

aId

aho

Arizon

a

Arkan

sas

Florid

a

Penns

ylva

nia

Mon

tana

Wes

t Virg

inia

Wisc

onsin

Mas

sach

usett

s

State

Per

Cen

t

Demographic Developments Influencing

the Growth of the Current and Future Labor Force of New England

Net out-migration from the region of working-age individuals has been quite high over the past few years- a net loss of between 60 and 70,000 persons to other regions per year

In 2005, four of the six New England states experienced net out-migration with the problem being most severe in Massachusetts(-42,500); only New Hampshire and Maine were able to break even on this measure

Due to declining births and domestic out-migration of children (<18), the number of persons under 18 declined in each New England state between 2000 and 2005. For the region as a whole, the decline was over 96,000 or 3%. In Maine and Vermont, the declines were 8 to 10 per cent

Over the coming decade,(2005-2015) , the teen population in our region will be declining. The number of 16-19 year olds will fall by nearly 53,000 or close to 7% with Maine and Vermont projected to experience more substantial declines of 16 to 19 per cent

In all of our states with exception of New Hampshire, the net increase in the working-age population will come from the 55 and older population of the region

Trends in the Number of Persons Under 18 in New England States between 2000 and 2005, Absolute and Per Cent Change

State

Absolute Change

Per Cent Change

Connecticut -6,682 -.8 Maine -23,902 -7.9 Massachusetts -42,028 -2.8 New Hampshire -6,411 -2.1 Rhode Island -2,468 -1.0 Vermont -14,904 -10.1 New England -96,395 -2.9

Net Domestic Migration of Persons 16 Years and Older in New England States

During 2005

-61,561

1,745 455

-3,641 -4,569

-10,878

-42,455

-70,000

-60,000

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

New

Eng

land

Mai

ne

New

Ham

pshi

re

Ver

mon

t

Con

nect

icut

Rho

de I

slan

d

Mas

sach

uset

ts

Net Domestic Migration of 16 and Older Labor Force Participants in New

England and Massachusetts During 2005

-42,455

-2,717

-10,073

-15,443

-3,863

-10,359

-61,561

-4,050

-15,647

-19,823

-13,575

-8,466

-70,000

-60,000

-50,000

-40,000

-30,000

-20,000

-10,000

0

All <12 or 12, No HSDiploma

High SchoolDiploma/GED

Some College Bachelor's Degree Master's or HigherDegree

MA

New England

Share of the Projected Working Age Population Growth Due to Persons 55 and

Older in New England, 2000-2005

Area Share

New England 118.8 Connecticut 143.4 Maine 131.2 Massachusetts 119.1 New Hampshire 117.7 Rhode Island 102.8 Vermont 89.5

Trends in the Labor Force Participation Behavior of New England Residents

Between 2000 and 2005

The overall participation rate of New England residents declined slightly between 2000 and 2005. It fell from 68.4% to 67.8%, a drop of less than one percentage point. The US participation rate fell by one percentage point over the same time period

The participation rate decline in our region was entirely due to the behavior of men. Their rate fell from 75.1% to 73.8% while that of women was unchanged at 62.4%. Between 1989 and 2005, the participation rate of men in our region fell by 5 percentage points. If the 1989 rate of 79% had prevailed in 2005, there would have been nearly 270,000 more men in the region’s labor force.

There were very large differences in participation rate changes across age groups, with steep declines among teens (-6 percentage points), young adults (-3 percentage points) and 30-34 year olds (-5 percentage points). In contrast, the participation rates of 55-64 year olds and 65-74 year olds rose by three percentage points.

Declines in the participation rates of teens were steep in each New England state, especially in Massachusetts, New Hampshire and Vermont (- 6 to 10 percentage points). Older worker participation rates increased in nearly every state in the region.

Labor Force Participation Rates for the Working-Age Population in New

England, All and Gender, 1989-2005

69.3 68.4 67.8

78.775.1 73.8

60.9 62.4 62.3

0

10

20

30

40

50

60

70

80

90

1989 2000 2005

%

All

Men

Women

Changes in the Labor Force Participation Rates of the Working-age Population in New England, All and by Gender and Age Group, 2000-2005 (in %, annual

averages)

Group

2000

2005

Change 2000-2005

All (16+) 68.4 67.8 -.6 Men 75.1 73.8 -1.3 Women 62.4 62.3 -.1 16-19 55.1 49.5 -5.6 20-24 76.0 73.4 -2.6 25-29 86.3 85.9 -.4 30-34 86.0 80.9 -5.1 35-44 86.0 84.2 -1.8 45-54 85.8 84.5 -1.3 55-64 65.2 68.1 +2.9 65+ 14.0 17.1 +3.1

Changes in the Civilian Labor Force Participation Rates of Teens (16-19) in Each New England State between 2000 and 2005

(annual averages in %)

State

2000

2005

2000-2005 Change

Connecticut 52.4 48.5 -3.9 Maine 56.8 52.3 -4.5 Massachusetts 52.6 47.1 -5.5 New Hampshire 65.7 54.5 -11.2 Rhode Island 57.8 53.5 -4.3 Vermont 62.9 56.2 -6.7 New England 55.1 49.5 -5.6 U.S. 52.4 44.7 -7.7

Increases in Labor Underutilization and Unutilization in New England Between 2000 and

2005 (Annual Averages)

Key Findings:1. A major increase in the pool of unutilized and underutilized

labor to 769,000 in 2003 – a 60% increase.2. Labor force reserve rose above 201,000 in 2005, a near 40 per

cent increase; a major pool of untapped labor3. 1-10 members of the region’s adjusted labor force were either

completely unutilized or underutilized in 2005.

Type of Problem 2000 2005 Absolute Increase

Per Cent Increase

Unemployment 206,400 369,420 163,020 79% Underemployment 131,339 198,743 67,404 +51% Labor force reserve 144,913 201,144 56,231 +39% Total, Above 3 Problems 482,652 769,307 286,655 +59%

Underutilization rate

6.4% 10.0%

+3.6 percentage

points 55%

Labor Underutilization Rates of New England Workers by Educational

Attainment, 2005 (Annual Averages in %)

23.4

11.1

9.3

6.5

4.0

0

5

10

15

20

25

<12 or 12, nodiploma / GED

H.S. Diploma 13-15 Years B.A. Master's or higher

Educational Attainment

Per

Cen

t

Labor Underutilization Rates of High School Dropouts in New England by State, 2005

(Annual Averages, in %)

18

22 22

25

27 27

0

5

10

15

20

25

30

New Hampshire Rhode Island Massachusetts Vermont Connecticut Maine

State

Per

Cen

t

Implications for Future Workforce Development Policies and Programs

1. How to strengthen the labor force attachment of key demographic subgroups in the region over the remainder of the decade

Teenagers in general (16-19) with a major emphasis on low income teens; racial-ethnic minorities, and high school dropouts (the number of teens will be falling in every New England state over coming decade with steep declines in the northern tier of New England states)

Young adults (20-24) including high school graduates with no college and young college student graduates; how to improve our retention of young college graduates

Males 20-54 years old with no substantive post-secondary education; their participation rates have declined sharply since 1990-many end up on the SSI and SSDI disability rolls.

The heads of poor / near poor households in our region; only 42 per cent of these low income householders were working in each of our six states in 2005, New England as a whole with rates of 41 to 45 per cent

The physically and mentally disabled; the number of disabled adults in our region has risen over the past decade. Only one-third of 16-74 year old disabled adults in New England were working in 2004. There is a very strong overlap between the poor / near poor and disabled householders in Massachusetts in 2005. Three of every eight poor / near poor households also were disabled, and among those 45 and older, between 51 and 63 per cent were disabled. Anti-poverty policies and disability policies need to go more hand in hand in our region.

Employment / Population Ratio of 16-74 Year Old Disabled in the U.S., New England,

and New England States During 2005

31.934.0

32.2 32.9 33.535.3

36.838.5

0

5

10

15

20

25

30

35

40

45U

.S.

New

Engla

nd

Mass

ach

use

tts

Main

e

Rhode I

sland

New

Ham

psh

ire

Connect

icut

Verm

ont

Percent of 16-74 Year Old Poor/Near Poor Householder in Massachusetts and the U.S. Who

Were Disabled, Total and by Selected Age Group, 2005

37.6

2.0

9.012.2

33.5

50.9

63.461.0

8.8 9.3

15.4

32.4

27.8

45.5

55.856.6

0

10

20

30

40

50

60

70

All 16-19 20-24 25-34 35-44 45-54 55-64 65-74

MAU.S.

Percent of 16-74 Year Old Who Were Poor / Near Poor by Disability Status, 2005

27.726.3

27.3

8.1 7.8

11.9

0

5

10

15

20

25

30

Massachusetts New England U.S.

DisabledNon-Disabled