New Research Finds Northeast Region Facing Challenge Creating Next Generation of Skilled Workers
BOSTON – Thursday, November 8, 2012 – The Executive Office of Labor and Workforce Development (EOLWD) and the Federal Reserve Bank of Boston today announced that 45 percent of the Northeast region’s civilian labor force was 45 years of age or older, while only 30 percent were under the age of 35. The region’s labor force is older than the state’s labor force. As a consequence, the region faces the challenge of equipping younger workers with the skills needed to replace retiring baby boomers. The report, entitled “Labor Market Trends in the Northeast Region,” is part of a joint project between EOLWD’s Commonwealth Corporation and the Boston Fed’s New England Public Policy Center.
“The Patrick-Murray Administration is strengthening pathways for new and incumbent workers in the Northeast region by aligning public post-secondary education with the skill needs of employers, especially at the community college level. Given the increasing skill levels required in the Northeast region, it is critical that we continue to focus on building education and career pathways for residents and workers that support them in advancing into middle and high skill jobs,” said Joanne F. Goldstein, Secretary of Labor and Workforce Development.
The Northeast labor market borders the Boston/Metro North, Central Mass, and Metro South/West regional labor markets. It is composed of 42 Massachusetts cities and towns in Essex and Middlesex counties. Some of the larger cities and towns include Lowell, Lynn, Lawrence, Haverhill, Peabody, Methuen, and Salem.
Despite a challenging decade, the Northeast region has fared better than most other Massachusetts labor markets. After two recessions and a decade of declining employment, the region is now gaining jobs and recovering at a modest pace, in response to a growth strategy targeted at education, innovation, and infrastructure investments. The recent recovery from the global economic collapse has been somewhat stronger in the region than in the state as a whole. In the first two years of the recovery in employment (Q4 2009 to Q4 2011) the Northeast region has expanded employment by 3.6 percent, far exceeding the employment recovery of all other regional labor markets, the state (2.9 percent) and the nation (2.1 percent).
Looking forward, the region faces the demographic challenges of an aging population and retiring baby boomers yielding potential shortfalls in workers with the educational levels required by employers. In 2008-2010, 45.8 percent of the region’s civilian labor force was 45 years or older, compared with 44.4 percent of the state’s labor force who were a similar age. Only 31.8 percent of the region’s labor force was under 35 years old. Moreover, in the past decade, there has been strong growth in the share of workers who are over 45 years old and a declining number of workers between the ages of 25 and 44.
Yolanda Kodrzycki, Vice President and Director of the New England Public Policy Center at the Federal Reserve Bank of Boston, noted that, “While the region has comparable levels of post-secondary educational attainment to the state, it is also home to a significant number of people who 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 2008-10, more than 119,000 of the Northeast region’s working-age residents (14.8 percent) lacked a High School Degree. This is higher than the share in the state (13.9 percent) but it is still lower than in the nation (17.6 percent).
Younger workers account for a disproportionate share of the unemployed. While young workers between the ages of 16 and 24 make up 13.1 percent of the civilian labor force they account for 25.8 percent of the unemployed in the Northeast. “Across the state, our young people are struggling to gain a foothold in the labor market. Creating strategies to increase youth employment must be a priority. Early work experience generates important work readiness skills, and a lack of work history leads to a weak connection to the labor market over a worker’s lifetime,” said Nancy Snyder, President of Commonwealth Corporation.
The education level of the labor force in the region increased over the past decade. By the end of the decade, two-thirds (66.8 percent) of the civilian labor force in the Northeast region had completed at least some post-secondary education (Some College or higher). This was slightly below the 67.8 percent in Massachusetts but greater than the share nationwide (61.9 percent) that had some post-secondary education. The share of the civilian labor force in the region with a Bachelor’s Degree or higher in the Northeast was 37.9 percent, compared with 41.2 percent of Massachusetts residents with similar education levels.
“The findings released today show the critical need businesses in the Merrimack Valley will face as they seek a qualified, educated and skilled workforce in the next decade,” said Joseph Bevilacqua, Chair of the Merrimack Valley Workforce Board. “The data further illustrates the need for young people to stay in school and graduate and continue on with their education if they are to have a successful career.”
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. The number of students enrolled full-time in public two- and four-year institutions in the Northeast region has grown more robustly than enrollment in private institutions. Further, enrollments have increased at much faster rates in the region than in Massachusetts and the United States.
In addition to the increase in enrollments, there has been strong growth in the number of students completing their degrees. The growth in the number of students earning post-secondary degrees at institutions in the Northeast surpassed the growth in Massachusetts for all three types of post-secondary degrees (Certificates, Associate’s Degrees, and Bachelor’s Degrees). Public institutions play a key role in the Northeast. The region’s two community colleges, Northern Essex and North Shore, accounted for 93.3 percent of Associate’s Degree completions in 2010. Data on Middlesex Community College is reported in the MetroSouth/West regional profile, although the college serves a significant number of students in the Northeast. Data in the MetroSouth/West report shows that Middlesex awarded the highest number of Associate’s Degree of all two-year institutions in that region. The Northeast region’s two public colleges, University of Massachusetts-Lowell and Salem State University, accounted for 66.4 percent of Bachelor’s Degree completions that year.
“The Northeast Regional research clearly shows the need to work in creating additional career pathways for unemployed and younger workers to replace baby boomers,” said Kevin E. Coughlin, Chairman, Greater Lowell Workforce Investment Board. “This is especially telling with the region’s growth in the areas of healthcare, advanced manufacturing and professional and technical services.”
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.
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.