New Research on the Southeast Region of the State Finds Young People and Those with Less Education Acutely Impacted by the Recent Recession
BOSTON – Wednesday, October 17, 2012 – The Executive Office of Labor and Workforce Development (EOLWD) and the Federal Reserve Bank of Boston today released a report showing that young people less than 35 years old and those with a high school degree or less were disproportionately affected by the Recession. Since 2010, the Southeast region had the highest unemployment rate in the state. The report, entitled “Labor Market Trends in the Southeast Region,” is part of a joint project between EOLWD’s Commonwealth Corporation and the Boston Fed’s New England Public Policy Center.
“This report will serve as a roadmap for building the education and career pathways Southeast regional workers will need for Massachusetts’ 21st century jobs. The Patrick-Murray Administration is already working to connect and align our public post-secondary education and workforce development systems with the skill needs of employers, especially at the community college level. The labor market trends highlighted today will further inform our strategies for addressing the needs of the Southeast region,” said Joanne F. Goldstein, Secretary of Labor and Workforce Development.
The Southeast region is composed of 56 Massachusetts cities and towns in Bristol, Norfolk, and Plymouth counties. Some of the larger cities and towns include New Bedford, Brockton, Quincy, Fall River, Plymouth, Taunton, and Weymouth. The region includes four Workforce Investment Boards (WIBs).
The past decade has been challenging for the Southeast region’s economy. Job losses in the global economic collapse resulted in employment levels lower at the end of the decade than those at the start of the decade. The region is now gaining jobs and on the road to recovery, in response to a growth strategy targeted at education, innovation and infrastructure investments.
During the global economic collapse, the Southeast had the highest unemployment rate among all the regional labor markets. The Southeast’s unemployment rate increased from 5.1 percent in 2007 to 9.6 percent in 2010. As of August 2012, the region’s unemployment rate had dropped to 7.4 percent, still above the 6.4 percent statewide rate. While the high unemployment has impacted all demographic groups, today’s report showed that it has been concentrated among the young and those with lower levels of education.
The findings of the report indicated that younger people were disproportionately represented among the unemployed. In 2008-2010, people between the ages of 16 and 24 accounted for the largest share of the unemployed among all age groups (27.7 percent) but were the second-smallest age group in the civilian labor force (behind those age 65 and older), at only 13.6 percent. More generally, while 31.5 percent of the civilian labor force in the Southeast region was under 35 years old at the end of the decade, 45.1 percent of the region’s unemployed was under 35.
“Nearly 30 percent of the unemployed in the Southeast region are younger workers, 16-24 years of age. Given the importance of this cohort in the regional economy and the pending retirement of baby boomers, we must work together to create effective entry ramps to the knowledge and innovation economy for young workers,” said Nancy Snyder, President of Commonwealth Corporation.
People with a high school degree or less accounted for 55.3 percent of the unemployed in the Southeast region in 2008-2010, which was well above the comparable share in Massachusetts (50.5 percent). Although people at all educational levels were affected by the global economic collapse, people with less education were disproportionately represented among the unemployed. For example, in 2008-2010, those with less than a high school degree represented only 9.8 percent of the civilian labor force, but accounted for the 21.1 percent of the unemployed.
The region also faces the demographic challenges of an aging population and potential shortfalls in workers with the educational levels required by employers, as the baby boomers retire. In 2008-2010, over 45 percent of the region’s civilian labor force was 45 years of age or older, while only about 30 percent were 34 or younger. And, while the residents of region have obtained progressively higher levels of education in the past decade, the region still trails the state in terms of its educational attainment. In 2008-2010, 32.3 percent of the civilian labor force in the Southeast had a Bachelor’s Degree or higher, compared with 41.2 percent in Massachusetts. The Southeast region also has a considerable number of residents with limited education. In the Southeast, 15.5 percent of the working-age population has less than a high school degree, compared with 13.9 percent in Massachusetts.
Yolanda Kodrzycki, Vice President and Director of the New England Public Policy Center at the Federal Reserve Bank of Boston, noted that, “While educational attainment in the region has increased, a significant number of people still lack a high school degree. Without completing high school and getting some further education or training, many residents cannot participate fully in today’s labor market.” In the Southeast, 37.3 percent of the civilian labor force has a High school degree or less, compared with 31.2 percent in Massachusetts.
The region’s higher education institutions have a critical role to play in influencing the region’s future supply of workers. More and more individuals have been seeking post-secondary education over the last decade. Full-time and part-time enrollments at less-than-two-year and two-year institutions in the Southeast have increased, and full-time enrollments at four-year institutions have also increased. The region’s public two- and four-year institutions are the main drivers of enrollment at post-secondary institutions, and the growth in enrollment at public institutions surpassed both statewide and national trends over the past decade.
“The data from the Federal Reserve’s New England Public Policy Center identifies employment and occupational trends that will aid us in planning educational and training programs at Massasoit Community College. As a long term partner and key stakeholder in the future of workforce development, this information will help to guide us in meeting the needs of our students, local employers and the regional economy, “ stated Charles Wall, President of Massasoit Community College.
Between 2000 and 2010, the number of students completing Certificates, Associate’s Degrees, and Bachelor’s Degrees at institutions in the Southeast region grew faster than in Massachusetts. Notably, a large share of the region’s post-secondary degrees was completed at public institutions, particularly Associate’s Degrees (81.8 percent) and Bachelor’s Degrees (60.5 percent). Most major fields of study grew during the past decade, especially in recent years. In particular, the number of people earning Certificates, Associate’s Degrees, and Bachelor’s Degrees in Health Sciences increased toward the end of the decade.
The FY13 budget Governor Deval Patrick signed in July begins to address the “skills gap” by adopting the Governor’s proposal to create a more unified, coordinated community college system. The reforms will enable students to transfer their credits more easily and local campuses to be more responsive to the needs of local economies as well as of the state’s fastest growing sectors.
Even during the recession, the Patrick-Murray Administration pursed a growth strategy focused on investing in education, infrastructure and innovation, and the state is seeing results. Massachusetts’ students rank first in the nation in student achievement and Massachusetts is leading the world in innovation and the life sciences. At 6.3 percent, unemployment in Massachusetts remains well below the national average.
The full report and appendices are available online at http://www.bostonfed.org/neppc
About Commonwealth Corporation: Commonwealth Corporation strengthens the skills of youth and adults by investing in innovative partnerships with industry, education, and workforce organizations. We seek to meet the immediate and emerging needs of businesses and workers so that they can thrive in our dynamic economy. Commonwealth Corporation is a Massachusetts quasi-public corporation within the Executive Office of Labor and Workforce Development.
About the New England Public Policy Center at the Federal Reserve Bank of Boston: The Federal Reserve Bank of Boston has a decades-long tradition of supporting the New England public policy community. In 2005, the Bank established the New England Public Policy Center to reinvigorate and institutionalize that support. The Center promotes better public policy in New England by conducting and disseminating objective, high-quality research and analysis of strategically identified regional economic and policy issues and, when appropriate, works with regional and Bank partners to advance identified policy options.