2017 ECONOMIC AND WORKFORCE PROFILE Pierce County
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1 2017 ECONOMIC AND WORKFORCE PROFILE Pierce County STATE OF WISCONSIN DETI PRC-P (R. 3/2018)
2 Percentage of Total Popula on, Ages 65 and Older
3 Wisconsin now has more people employed and more private sector jobs than at any me in its history. As of this wri ng, the state added 56,100 jobs during 2016 and Employment increased in almost all industry sectors, with prominent gains in construc on, manufacturing, and healthcare. Wisconsin s unemployment rate is near lows not seen in a genera on, decreasing from 4.3 percent in January 2016 to 3.2 percent in December 2017, on a seasonally adjusted basis. Wisconsin faces a worker quan ty challenge. The number of re ring Baby Boomers nearly match the influx of new workers, resul ng in a slow growing workforce and placing constraints on the ability by employers across all industries to hire talent. Many businesses report that the lack of available workers has hindered expansion and, in some cases, even curtailed their ability to meet current product orders. The blue line, orange line graph to the right illustrates the situa on in Wisconsin and other upper Midwest states. While Wisconsin's popula on will con nue to grow over the next twenty years, the workforce faces serious constraints. The labor force par cipa on rate (LFPR), defined as the labor force (sum of employed and unemployed) divided by the total popula on ages 16 and older, measures the popula on's engagement in the workforce and serves as an indicator in determining how Wisconsin's workforce will be constrained. The overall LFPR peaked in the late 1990s and has been trending lower ever since. The LFPR of peaks across Source: Local Area Unemployment Sta s cs, Bureau of Labor Sta s cs the age cohort at over ninety percent and decreases rapidly into the single digits by age seventy. Baby Boomers have and con nue to exit with respect to their LFPR. The mass of Baby Boomers has moved into the work lifecycle stage of declining LFPRs, with the tail end of the cohort turning 55 in Source: Bureau of Labor Sta s cs A recent development is the change in the labor force par cipa on rate trend. The LFPR of older workers (those aged 55 years and older) has turned upwards, resul ng in fla ening of the overall LFPR. More boomers are staying in the workforce longer, which may portend higher workforce growth over the coming years. Due to the size of the Baby Boomer cohort and the sensi vity of the LFPR to workforce growth rates, a rela vely small change in the LFPR of older workers would significantly boost the number in the workforce. 1
4 Popula on and Demographics Source: Demographic Services Center, Wisconsin Department of Administra on Pierce County added 301 residents from April 2010 to January 2016, growing at a rate of 0.7%, slower than the statewide growth rate of 1.5%. However, Pierce s ll ranked the 34th fastest growing among the state s 72 coun es. Net migra on, which is defined as people moving into the county minus those leaving, was actually nega ve for the period studied, as it was in just over a third of Wisconsin coun es over the last five years. Popula on change due to net migra on was 1.3% from 2010 to 2016, up from a 1.5% drop in the trend in the last county profile, sugges ng more recent trends have been towards net in migra on rather than out migra on. Growth due to natural increase (as seen on the graph below) was 2.0% in Pierce County, higher than the statewide percent gain. This highlights the low median age in the county. Pierce County s median age of 35.9 is ranked the 7th lowest in the state (ACS, ). Components of Popula on Change The City of River Falls, home to the University of Wisconsin River Falls, is the largest popula on center in Pierce County. The city gained 69 residents from 2010 to 2016, growing at a rate of 0.6% The municipali es that experienced the most growth tended to be near the Minnesota border, a con nua on of a common trend. Commu ng drives the county s growth as workers deal with ever longer drive mes to achieve their desired lifestyle, rais Source: Demographic Services Center, Wisconsin Department of Administra on 2
5 Labor Force Dynamics ing their families in Pierce. Source: Local Area Unemployment Sta s cs, Bureau of Labor Sta s cs The graph above compares Pierce County s monthly unemployment rate to the state and na on. Pierce s rate of 2.8% in May 2017 is quite low historically speaking, although not as low as during the booming economy of the late 1990s. While a growing economy is par ally responsible for today s low unemployment rates, the trend of slow labor force growth (or even declines in some coun es) due to baby boomers leaving the labor force also impacts the rates. Source: Local Area Unemployment Sta s cs, Bureau of Labor Sta s cs You can see this concept displayed on the graph to the le. The labor force consists of the employed and unemployed (represented as the sum of stacked bars in the graph), so the trend will be along the top edge of the bars. Pierce s labor force has seen significantly slower growth this decade than the early 2000s, a trend likely to con nue into at least the next decade. Pierce s younger popula on may blunt some of the impact that re ring baby boomers will have on the area s labor force, but it s important to remember that many of 3
6 Industry Employment and Wages those younger workers are already employed in the Twin Ci es. This is a be er situa on than many Wisconsin coun es face; it tends to be easier to get people already living in a county to work there in return for a shorter commute, rather than luring workers from other coun es or states. Pierce County saw job growth of roughly 1.6% (160 jobs), from 2015 to 2016, ranking it 21st among the state s 72 coun es, by percent change. Pierce s all industry wage was 77.7% of the statewide level, similar to past trends Educa on and health services, by far the largest industry super sector of employment listed in Pierce County, lost 30 jobs from 2015 to Wages in educa on and health are 74.5% of the statewide average; the healthcare industry in smaller rural coun es tend to have lower con centra ons of highly paid spe cialists, a factor that normally lowers average healthcare wages outside of more urban areas. Wages in the educa on sector were much closer to the statewide average, proba bly due to the presence of UW River Falls. Manufacturing is the third largest super sector of em ployment (a er trade, trans porta on, and u li es) in 4
7 Employment Projec ons Pierce County, though it is actually the second largest in terms of total payroll, due to rela vely high average wages. Manufacturing gained 15 jobs from 2015 to 2016, with employment stable amongst the various manufacturing sub sectors. Computer and electronic product manufacturing, and food manufacturing were the top manufacturing sub sectors in the county by employment. Wages in this super sector are about 88% of the statewide average, and up a couple percent points from last profile. While studying past trends is useful, DWD also produces projec ons of industry and occupa on employment into the future. The industry and occupa onal employment projec ons in this profile are for the nine county West Central Wisconsin Workforce Development Area, produced every two years, following Bureau of Labor Sta s cs methodology. While this region includes more than just Pierce County, which accounts for about 5% of employment in the region, employment and economic dynamics are similar enough throughout the region to comment on general trends. Employment across all industries is expected to grow by about 6% over the ten year period, or almost 14,000 workers. This projec on only forecasts levels of filled posi ons rather than poten al demand. This further illustrates the issues associated with the aging popula on while growth in the labor force is slowing, and in some coun es even declining, job growth is expected to con nue. So while businesses are already having difficulty filling the job openings vacated by re rees, increasing difficulty will be felt filling new openings as well, which could even end up constraining job growth by limi ng expansions. Solu ons to this issue will be different for each business, but will likely include a combina on of possibili es like talent pipeline development (examples include the Wisconsin Fast Forward training grants, and business alliances aimed at marke ng specific careers), increased focus on talent a rac on and reten on, engaging under u lized workforces (like those with barriers to workforce entry), increased automa on, and retaining re rees in nonconven onal work arrangements to name a few. 5
8 Employment ProjecƟons Source: Office of Economic Advisors, Wisconsin Department of Workforce Development, September 2015 The most significant numerical growth is expected in Educa on and Health Services (3,353, 6% growth rate), and Professional and Business Services (2,272, 13.5% growth rate). Another super sector with strong an cipated growth is the Construc on sector (1,085, 15.7%). While industry projec ons have their uses, a more func onal approach is projected occupa onal growth. An examina on of projected occupa onal employment growth reveals a possible explana on for the moderate growth rates an cipated in a number of the region s largest industry sectors. We first see that the most signifi cant occupa onal growth can be observed in a number of occupa onal categories largely concentrated in the Health Services sector, including Healthcare Prac oners, Healthcare Support, and Personal Care and Services workers. Significant growth is also an cipated in many other occupa onal sectors, suppor ng the narra ve of long range stability in many of the region s largest industries. The other trend that is also illustrated is that of labor constraints as openings created due to replacement needs outnumber those generated by new growth by over three to one in the region. This is the reason for the increased importance placed on the availability and skill sets of young workers entering the region s workforce. It s vitally important to realize that slow growth or declines in employment don t necessarily reflect on the health of those industries. Employment declines may be due to factors such as increased automa on and produc vity. There will be many openings simply due to re re ments! 6
9 Further illustra ng the impact of aging demographics, the graph above depicts the job base by major industry sector outlining the age distribu on of its job holders in the West Central region. The age distribu ons vary widely from industry to industry, easily observed from the graph. Occupa onal composi on within an area is a complex factor, influenced first by overall labor availability, then individual job holders life stage, experience, educa on/training, etc. This tends to correspond to age. For example, younger inexperienced workers, like many of the region s students, tend to work in entry level jobs. These entry jobs are more prominent in industries such as the leisure and hospitality sector. Other industries, such as the educa on and health care sector, require workers to have completed a higher level of formal educa on or training and so they have a rela vely low share of the youngest working cohorts. Typically, higher educa on levels tend to correspond to older age groups who have invested the me necessary to achieve those advanced educa onal levels. O en when examining age/labor force issues, we focus too broadly on labor force entry and exit data, to tell us how many workers are available. While useful, this ignores the dynamics within the workforce, which is not a homogenous popula on. Data such as age by industry can give us ac onable informa on like which industry will have the most upcoming re rements, promp ng a need for recruitment and succession planning. For More Informa on: Sco Hodek Regional Economist West Central WDA Phone: (715) sco.hodek@dwd.wisconsin.gov 7
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