Workforce Development and Labor Trends in New Jersey

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

New Jersey Employment (2000-2017) 5,000,000 20 18 4,500,000 16 Total New Jerseyans 4,000,000 3,500,000 3,000,000 14 12 10 8 6 Unemployment Rate 2,500,000 4 2 2,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year 0 NJ Number Employed NJ Number Unemployed NJ Unemployment Rate US Unemployment Rate 2 Source: BLS CPS, Local Area Unemployment Statistics

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+ 15-26 wks 5-14 wks LT 5 wks 3 Source: BLS CPS, Local Area Unemployment Statistics

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 2000-2017) 45.0 43.7 40.0 35.0 35.7 Weeks Unemployed 30.0 25.0 20.0 15.9 28.1 15.0 10.0 5.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017p Year 4 Source: BLS CPS, Local Area Unemployment Statistics

800,000 The official unemployment rate does not capture all individuals looking for work Alternate Measures of Unemployment in New Jersey (2003-2017) 700,000 New Jersey Civilian Labor Force 600,000 500,000 400,000 300,000 200,000 Involuntary Part-Time Marginally AIached Unemployed (official rate) U-3 U-5 U-6 100,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 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

The unemployment rate for black New Jerseyans was nearly double that of white residents aged 25 to 34 12 Unemployment Rate by race and age, NJ, 2016 10 Unemployment Rate, 2016 8 6 4 2 0 White Black Asian Hispanic White Black Asian Hispanic White Black Asian Hispanic White Black Asian Hispanic 25-34 35-44 45-54 55-64 Sample size for 55-64 age group, Asian was too small for reliable estimate 6 Source: BLS CPS

Nationally, inflation tends to outpace annual median wage changes 4% Annual Infation and Wage Change, 2009-2017, US 3% 2% 1% 0% -1% 2009 2010 2011 2012 2013 2014 2015 2016 2017* -2% Annual Inflation Change -3% *Inflation change estimate for 2017 is based on the change in the CPI from Q3 2016 to Q3 2017 Annual Median Wage Change (Inflation Adjusted) 7 Source: BLS Median Weekly Earnings, Consumer Price Index data

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 (1976-2017) 69% 67% 65% 63% 61.58% 61% 63.10% 62.84% 59% 57% 55% 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 NJ LFPR US LFPR 8 Source: BLS CPS

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 2016 58,339 64,065 128,512 120,479 61,430 Graduate or professional degree 70% 975,284 182,751 58,433 Bachelor's degree 60% 50% 247,359 179,782 Associate's degree Some college, no degree 40% 599,834 315,517 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 2016 1-year estimates

Improvements in Educational attainment, but gaps remain Percentage change in populaqon 2006-16 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Change by EducaQonal aiainment, New Jersey, 2006-16 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 2016 1 year estimates

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

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

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 90 80 78.1 70 65.4 70.7 63.8 60 50 54.2 49.1 45.3 40 32.2 30 20 10 0 24.7 Total 25.7 23.1 24.3 20.7 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

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

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

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

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

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

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

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

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) 932-1153 Email: vanhorn@rci.rutgers.edu 21

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

Alternate Measures of Unemployment Unemployment Measures (U-3 and U-6 for US and NJ, 2003-2016) 18 16.7 Percent of Noninstitutionalized Civilian Population 16 14 12 10 8 6 4 2 10.1 9 6.0 5.9 9.6 16 9.5 9.2 8.5 4.6 4.4 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U3 NJ U3 US U6 NJ U6 US Source: BLS CPS, Local Area Unemployment Statistics 23

Educational Attainment in NJ 100% 90% 80% 70% 60% 50% 40% 30% 20% 670,786 400,332 186,288 268,485 1,024,289 1,706,073 Educational Attainment for population 25 years and over, 2016 estimates 297,488 1,460,518 541,369 860,491 415,150 779,195 528,502 629,351 1,124,295 363,356 734,632 678,776 1,046,470 1,156,496 1,521,940 2,749,619 1,191,816 2,150,858 765,331 1,676,971 730,217 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% 480,450 175,734 289,469 319,894 1,294,789 658,997 New Jersey Connecticut Maryland Massachusetts New York Pennsylvania No schooling completed 24