Workforce Development and Labor Trends in New Jersey

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1 Workforce Development and Labor Trends in New Jersey Carl Van Horn, Ph.D. Distinguished Professor of Public Policy and Director Edward J. Bloustein School of Planning and Public Policy Rutgers University

2 New Jersey Employment ( ) 5,000, ,500, Total New Jerseyans 4,000,000 3,500,000 3,000, Unemployment Rate 2,500, ,000, Year 0 NJ Number Employed NJ Number Unemployed NJ Unemployment Rate US Unemployment Rate 2 Source: BLS CPS, Local Area Unemployment Statistics

3 Unemployment tends to last longer for those out of work in New Jersey 100% Unemployed by Duration of Unemployment (2017 preliminary figures) 90% 26.6% 26.9% 27.5% 27.2% 27.6% 30.2% 80% Percent of all unemployed 70% 60% 50% 40% 30% 26.6% 15.0% 30.1% 29.6% 16.1% 17.6% 25.0% 14.7% 29.6% 26.9% 14.0% 18.5% 20% 10% 31.9% 26.9% 26.1% 33.1% 28.9% 24.4% 0% NJ CT MA MD NY PA 27 wks wks 5-14 wks LT 5 wks 3 Source: BLS CPS, Local Area Unemployment Statistics

4 Currently, the mean duration of unemployment for those in New Jersey is around 36 weeks 50.0 Mean Duration of Unemployment in New Jersey (Annual Averages ) Weeks Unemployed p Year 4 Source: BLS CPS, Local Area Unemployment Statistics

5 800,000 The official unemployment rate does not capture all individuals looking for work Alternate Measures of Unemployment in New Jersey ( ) 700,000 New Jersey Civilian Labor Force 600, , , , ,000 Involuntary Part-Time Marginally AIached Unemployed (official rate) U-3 U-5 U-6 100, U-3: total unemployed, as a percent of the civilian labor force (definition for the official unemployment rate) U-4: U-3 + discouraged workers U-5: U-3 + marginally attached workers U-6: U-5 + Persons employed part-time for economic reasons 5 Source: BLS CPS, Local Area Unemployment Statistics

6 The unemployment rate for black New Jerseyans was nearly double that of white residents aged 25 to Unemployment Rate by race and age, NJ, Unemployment Rate, White Black Asian Hispanic White Black Asian Hispanic White Black Asian Hispanic White Black Asian Hispanic Sample size for age group, Asian was too small for reliable estimate 6 Source: BLS CPS

7 Nationally, inflation tends to outpace annual median wage changes 4% Annual Infation and Wage Change, , US 3% 2% 1% 0% -1% * -2% Annual Inflation Change -3% *Inflation change estimate for 2017 is based on the change in the CPI from Q to Q Annual Median Wage Change (Inflation Adjusted) 7 Source: BLS Median Weekly Earnings, Consumer Price Index data

8 The percentage of people in the labor force those who are either already working or looking for work has fallen to the lowest level in three decades 71% Labor Force Participation Rate for NJ & US ( ) 69% 67% 65% 63% 61.58% 61% 63.10% 62.84% 59% 57% 55% NJ LFPR US LFPR 8 Source: BLS CPS

9 Half of all non-hispanic white New Jersey residents attain an Associate s degree or higher, compared to 30% of black residents, and less than 25% of Hispanic residents 100% 90% 80% 594,914 Educational Attainment by Race, New Jersey ,339 64, , ,479 61,430 Graduate or professional degree 70% 975, ,751 58,433 Bachelor's degree 60% 50% 247, ,782 Associate's degree Some college, no degree 40% 599, ,517 GED or alternative credential 30% 241,633 Regular high school diploma 20% 10% 0% 913,778 NON HISPANIC WHITE HISPANIC BLACK* 9th to 12th grade, no diploma Less than 9th grade * Black includes some Hispanics 9 Source: ACS year estimates

10 Improvements in Educational attainment, but gaps remain Percentage change in populaqon % 50% 40% 30% 20% 10% 0% -10% -20% -30% Change by EducaQonal aiainment, New Jersey, Between 2006 and 2016, total population over 25 years age is estimated to have gone up by 5% - Population with no schooling completed went up by 48% - Population with some college (no degree) or less went down by 5% - Population with associate s degree or higher went up by 20% 10 Source: ACS 2006 and year estimates

11 What are the new realities of the American labor market? Fewer stable and permanent jobs; Rising expectation that the workforce is better prepared before they begin working; and Increasingly difficult for students and workers - and labor market experts - to predict where specific jobs will be in 5, 10, or 20 years. 11

12 What are the implications for Education, Education Leaders, and Policy Makers? More pressure on schools and colleges to deliver better prepared graduates; Graduates increasingly accepting jobs previously held by graduates of lower-level degrees; and Proliferation of degree programs and certificates. 12

13 College graduation rates in New Jersey remain lower for minority students Graduation rates for New Jersey s two-year (cohort 2013) and four-year (cohort 2010) institutions Total Asian White Pac Island Hispanic 14.6 Black Am Indian Total Asian White Pac Island Hispanic Black Graduation rate 2 year (cohort 2013) Graduation Rate 4 year (cohort 2010) Am Indian 13 Source: US Department of Education, National Center for Education Statistics

14 New Jersey remains in the top five states with the highest average student loan balance 14 Source: Experian State of Student Loan Debt in 2017

15 How are employers responding? Employers regularly report that recent high school and college graduates are not adequately prepared for labor market success. Employers increasingly require more educational credentials. 15

16 What should educators and policy makers do? New Jersey must make an effort to increase high school and college completion rates. Public workforce development programs must do a better job of serving the needs of unemployed job seekers. New Jersey s education and workforce programs must provide better services to those who need the most help. Education and training programs must be transformed by deploying more cost-effective strategies and innovative technology. 16

17 Workforce Development Initiatives Reform UI System Increase Onthe-job Training Expand Internet Based Tools Increase Data Transparency for Decisionmaking! For those eligible, assistance should be more closely tied to participation in training and other workforce-related activities.!! More active interventions will help these workers find employment more quickly and avoid the consequences of long-term unemployment. 17

18 Workforce Development Initiatives Reform UI System Increase Onthe-job Training Expand Internet Based Tools Increase Data Transparency for Decisionmaking! New Jersey workforce development programs should allocate more to on-the-job programs and training for industrycertified credentials.! Public funding of specific community-college based training programs for the unemployed should be made available when the curriculum leads to the attainment of an industrysupported credential. 18

19 Workforce Development Initiatives Reform UI System Increase Onthe-job Training Expand Internet Based Tools Increase Data Transparency for Decisionmaking! The state should expand and enrich high-quality, Internetbased software platforms to deliver workforce development and reemployment services.! Job seekers and students need timely access to ongoing career management supports, industry-recognized training programs, and accurate information about skill needs and occupational requirements. 19

20 Workforce Development Initiatives Reform UI System Increase Onthe-job Training Expand Internet Based Tools Increase Data Transparency for Decisionmaking! New Jersey state government should integrate and analyze information to inform citizens and policymakers about the quality, cost, and benefits of education and workforce training programs.! The New Jersey Education to Earnings Data System (NJEEDS), housed at Rutgers University, will serve as a data resource to provide this critical information. 20

21 Contact Information For more information, please contact: Carl Van Horn, Ph.D. Distinguished Professor of Public Policy and Director Edward J. Bloustein School of Planning and Public Policy Rutgers University Phone: (732)

22 The unemployment rate varies throughout the state New Jersey Unemployment (February 2018) Source: BLS CPS, Local Area Unemployment Statistics Map 22

23 Alternate Measures of Unemployment Unemployment Measures (U-3 and U-6 for US and NJ, ) Percent of Noninstitutionalized Civilian Population U3 NJ U3 US U6 NJ U6 US Source: BLS CPS, Local Area Unemployment Statistics 23

24 Educational Attainment in NJ 100% 90% 80% 70% 60% 50% 40% 30% 20% 670, , , ,485 1,024,289 1,706,073 Educational Attainment for population 25 years and over, 2016 estimates 297,488 1,460, , , , , , ,351 1,124, , , ,776 1,046,470 1,156,496 1,521,940 2,749,619 1,191,816 2,150, ,331 1,676, ,217 1,431,231 3,574,814 3,132,444 Doctorate degree Professional school degree Master's degree Bachelor's degree Associate's degree Some College, no degree High school graduate (includes equivalency) 12th grade, no diploma Less than 12th grade 10% 0% 480, , , ,894 1,294, ,997 New Jersey Connecticut Maryland Massachusetts New York Pennsylvania No schooling completed 24

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