For Immediate Release - November 14, 2012

Pioneer Valley Region facing challenge creating next generation of skilled workers

BOSTON – Wednesday, November 14, 2012 – The Executive Office of Labor and Workforce Development (EOLWD) and the Federal Reserve Bank of Boston today announced that 47.1 percent of the region’s civilian labor force was 45 years of age or older, while only 31.9 percent was under the age of 35 in 2008-2010. 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 Pioneer Valley 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 Pioneer Valley by aligning public post-secondary education with the skill needs of employers, especially at the community college level.  Given the aging workforce and the increasing skill levels required in the Pioneer Valley, 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 Pioneer Valley labor market borders two regional labor markets: Berkshire and Central Mass. It is composed of 73 Massachusetts cit­ies and towns covering all of Hampden, Hampshire, and Franklin counties. In addition to Springfield, the third most populous city in Massachusetts, the region contains a number of other larger cities and towns, including: Chicopee, Westfield, Holyoke, Amherst, and Northampton.

The impact of the global economic collapse was particularly severe in Pioneer Valley: the region’s unemployment rate reached 9.0 percent in 2010, slightly below the national rate (9.6 percent) but far higher than the statewide rate of 8.3 percent.  At the time, the region had the third highest unemployment rate among all regional labor markets in the state. The region is now recov­ering from the global economic collapse, in response to a growth strategy targeted at education, innovation, and infrastructure investments. In the first two years of the labor market recovery, employment in Pioneer Valley increased by 2.2 percent, trailing the gains in Mas­sachusetts (2.9 percent) but slightly exceeding the United States (2.1 percent).

Younger workers account for a disproportionate share of the unemployed in the Pioneer Valley region.  While young workers between the ages of 16 and 24 make up 13.7 percent of the civilian labor force they account for 31.1 percent of the unemployed in the Pioneer Valley. “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.

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, 47.1 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 31.9 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 55 years old and a decline in the number of workers under the age of 45.

While the educational attainment levels in Pioneer Valley have been increasing over the past decade, they are well below those in Massachusetts and are closer to those in the United States. By 2008-2010, 30.5 percent of Berkshire’s civilian labor force had a Bachelor’s Degree or higher, compared with 41.2 percent for Massachusetts and 29.6 percent for the U.S. At the same time, the share of the labor force in Pioneer Valley with less than a high school degree was higher than that in Massachusetts and in any other regional labor market. In the Pioneer Valley, 10.7 percent of the civilian labor force does not have a high school degree, compared with 8.7 percent in Massachusetts. In fact, Pioneer Valley’s labor force has the highest share of individuals with a High School Degree or less (38.1 percent) of all regional labor market and far exceeds the share statewide (32.2 percent).

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 education. Without completing high school and getting some further education or training, many residents cannot participate fully in today’s labor market and are more likely to be unemployed.” In 2008-10, those with less than a high school education accounted for 10.1 percent of labor force in Pioneer Valley and the unemployment rate for such individuals was 20.3 percent.

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 Pioneer Valley region has grown over the last decade, but the rate of growth has trailed both the growth in Massachusetts and the United States.

In addition to increasing enrollments, there has also been growth in the number of students completing their degrees.  But, again, the growth in the number of students earning post-secondary degrees at institutions in the Pioneer Valley trailed the growth in Massachusetts for Certificates, Associate’s Degrees, and Bachelor’s Degrees. 

“It is imperative that we as a region focus on developing our labor pool of young people if our businesses are to have the middle skills worker they will inevitably need to be competitive,” said Joe Peters of Universal Plastics and Chair of the Regional Employment Board of Hampden County, Inc.  “New partnerships of business, K-12 and higher education must create career pathways, especially in high growth industries, so that young people can experience the connection between what they learn in school and the opportunities that are emerging in business. This report must give us all a renewed sense of urgency to recognize that the skills of our young people will drive our region’s economic growth.” 

Public institutions play a key role in the Pioneer Valley. In 2010, the region’s three community colleges—Holyoke, Springfield Technical, and Greenfield—accounted for nearly all of the Associ­ate’s Degrees completed in the region in 2010 (92.9 percent). The region’s two public colleges, University of Massachusetts–Amherst and Westfield State University, accounted for a majority (57.0 percent) of Bachelor’s Degree completions in Pioneer Valley that year. The region’s private institutions also played a con­siderable role in granting Bachelor’s Degrees. Led by Springfield College (9.6 percent), the nine private institutions in Pioneer Val­ley accounted for 43.0 percent of Bachelor’s Degree completions in 2010.

“With regard to the distinct skills gap identified in this report, Greenfield Community College is pleased to be participating in the development of a collaborative effort with the Franklin Hampshire REB, Franklin County Technical School, and local business leaders in an effort to reduce that gap,” said Robert Pura, President of Greenfield Community College. “Helping members of our community get good jobs at good wages, while helping area businesses hire and retain a good workforce is a win/win/win proposition.  It is how we build a sustainable community.”

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 enable local campuses to be more responsive to the needs of local economies as well as of the state’s fastest growing sectors.

“This report affirms the critical importance of Workforce Board Youth Councils, where schools, colleges, community-based organizations, and youth employment programs work hard to get young people attached early and successfully to the labor force,” said Edward Nuñez, Senior Business Development Officer, Freedom Credit Union and Chair of the Franklin Hampshire Workforce Investment Board.  “Business support of these Youth Councils is essential to ensure a viable workforce for the future.” 

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.

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