Commission Meeting Materials December 20, 2016 9:00 A.M. - Existing and Projected Shortages

I.Executive Summary

Texas Labor Code Section 302.019 requires the Texas Workforce Commission (TWC) to gather and study information relating to existing and projected shortages in high-wage, high-demand occupations in Texas annually, including for selected industries.

This report summarizes those findings by industry in Texas. The additional data used in this report is current as of the end of federal fiscal year 2016. Thus, the Quarterly Census of Employment and Wages (QCEW) data covers the period through first quarter 2016. The Current Employment Statistics (CES) data covers the period through the August 2016 estimates. Help Wanted Online (HWOL) data has been incorporated covering third quarter 2016.

Texas recovered robustly after the national recession of 2008-2009, taking only 39 months while the nation took 76. As of August 2016 Texas has experienced 76 consecutive months of annualized employment growth. The state has expanded employment 13.3 percent beyond its pre-recession peak, whereas national employment has expanded by 4.5 percent.

Texas remains driven by a continued economic shift towards high-skilled jobs in the Business and Professional Services sector, while the state’s rapid population growth and aging baby-boomer population increases demand for service sector jobs, primarily Leisure and Hospitality and Education and Health Services. These three industries in addition to Trade, Transportation, and Utilities account for over 55 percent of the jobs in Texas.

The occupations showing the highest current demand according to the HWOL data are typical of the Wholesale Trade, Accommodation and Food Services, and Construction industries. These industries also currently show the highest employment growth rates.

For this report, TWC staff measured industry employment levels over the most recent available five-year period (third quarter of 2010 to third quarter of 2015) using employment levels reported by Texas employers under TWC’s QCEW program. This report provides industry-level employment data along with HWOL data to provide comparison and context.

This report also contains TWC’s most current short- and long-term projections for employment growth in Texas. Short-term projections were released in February 2016 with a base year of 2015 covering the period of 2015 to 2017. Long-term projections were released in September 2016 with a base year of 2014 covering the period of 2014 to 2024. As a result, this report uses current employment statistics programs such as QCEW, CES and HWOL to better understand the current economic situation. The next short-term employment projections, covering the period of 2017 to 2019, will be released in the Spring 2017.

Due to shifts in the economy, required education and job training for the occupations in this report ranges from professional occupations requiring a college degree, to skilled trades in construction or manufacturing that require specific technical skills training. Some jobs in this report require no post-secondary education. However, higher-paying occupations tend to require:

a)a bachelor’s degree and specific technical skill training, or

b)some form of post-secondary education, specific technical skill training, and additional on-the-job training.

Since no official definition of a high wage occupation exists, TWC focused in this report on growing occupations that pay more than the Texas median wage of $34,550 per year.

TWC follows statistical data standards set by the agency’s contracts with the U.S. Bureau of Labor Statistics and the Employment and Training Administration division of the U.S. Department of Labor. In preparing the projections, TWC examined more than 800 occupations, segmenting them for specific industries. Those growth occupations are listed by industry sector in Section II.

II.Growth Occupations in Growth Industries

Positive growth continues to drive demand for workers in the United States, particularly in Texas and its surrounding states. In some key occupations, local supply has at times struggled to keep up with demand.

This report focuses on the most in-demand occupations in Texas from 2014 through 2024 (long-term) and 2015 through 2017 (short-term). It is important to remember that even similar job titles will require unique combinations of technical skills, education, work experience, and soft skills based on each employer’s unique needs.

This section identifies occupations within major industries as defined in Chapter 302. The charts display staffing and wage information for a specific occupation in that specific industry. Occupations are then ranked by the projected employment change in Texas from 2014 to 2024. Listed industry employment data corresponds with that industry’s North American Industry Classification System (NAICS) code.

A.Construction

The construction industry is projected to grow by 27.8 percent from 2014 to 2024, creating the need for 177,390 workers over the course of 10 years. Occupational projections also indicate that in the short and long terms, the highest demand will be for specialty trade workers to fill positions such as Electricians, Plumbers, and Carpenters.

In the first quarter 2016, employment with Construction companies reached 682,677 workers. Help Wanted Online construction data shows strong growth for the industry given third quarter 2016 job postings are up 5.6 percent from last year.

Demand for construction workers continues to rise. Texas second quarter 2016 home sales rose significantly, while housing inventory remains limited at 3.7 months, driving home prices up 7.5 percent from last year. These trends indicate strong demand for residential, commercial and industrial building projects.

Construction occupations projected to add the most jobs in the long and short term are listed below.

B.Manufacturing

Texas produces more than 11 percent of total manufactured goods in the United States[1]. It also exports more goods by dollar value to Mexico and Canada than it does to any other country. Despite a strong dollar, which typically reduces demand for exports, the Dallas Fed’s manufacturing production index posted a third consecutive positive reading in September[2], suggesting manufacturing output continues to expand in Texas.

The Quarterly Census of Employment and Wages program has shown manufacturing employment is up 30,808 jobs since first quarter 2011. Nondurable goods employment is up over the year, yet an increase in automation has led to a slowing in demand for durable goods manufacturing employment. The increase in automation and productivity has driven up manufacturing wages for 83 consecutive months according to the Dallas Fed’s monthly Manufacturing Outlook survey[3],possibly due to an increase in demand for higher-skilled employees.

Manufacturing industry employment is expected to increase by 7.2 percent by 2024. This increase spans a broad range of skill sets including Industrial Machinery Mechanics; Computer Controlled Machine Tool Operators; and Welders, Cutters, Solderers, and Brazers, among others.

The occupations within Manufacturing expected to increase in the near and long term are listed below.

C.Agriculture and Forestry

Though Texas’ Agriculture and Forestry industry is one of the smallest in terms of employment, it leads the nation in many ways. The industry produces the most cattle, cotton, hay, sheep, goats and mohair of any state in the nation.[4] Texas also has the most farms and ranches in the country: 248,800 covering 130.2 million acres.[5]

In Texas and across the nation,this industry has been using fewer and fewer workers in recent decades as farming methods have become more efficient. Farms now tend to be fewer in number, larger and more expensive to operate, but also much more productive.

From the first quarter of 2011 to the first quarter of 2016 the Agriculture and Forestry industry in Texas grew by 1.0 percent, adding 574 jobs. The industry is projected to add nearly 6,700 jobs by 2024, growing to 64,850 jobs total.

Agriculture and Forestry job postings decreased approximately 15 percent when comparing the third quarter of 2015 to the same quarter in 2016. However, it is worth noting that Texas’ Agriculture and Forestry employers post openings online less often compared to employers in other industries.

Agriculture and Forestry industry jobs projected to add the most positions over the long (2014-2024) and short (2015-2017) terms are listed below.

*Due to limited coverage in this industry, many agricultural workers are self-employed and are not covered by Unemployment Insurance and therefore are not sampled by the Occupational Employment Statistics (OES) program.

D.Health Care and Social Assistance

The Health Care and Social Assistance industry grew to 1,531,120 positions in first quarter 2016. The industry has averaged 2.8 percent annual growth over the past 5 years, resulting in 196,291 jobs added. According to long term industry projections, Health Care and Social Assistance employment is expected to grow to approximately 1,892,000 jobs by 2024, posting the strongest growth of the 11 industries in this report at 32.2 percent.

Ambulatory Health Care Services, which consists of doctors’ and dentists’ offices, outpatient care centers and medical and diagnostic laboratories, comprises about 45 percent of the Health Care and Social Assistance industry. Ambulatory Health Care Services has averaged 3.0 percent annual growth over the past five years, slightly faster than Health Care and Social Assistance overall.

A consistent need for nurses drives occupational demand within the Health Care and Social Assistance industry. According to Help Wanted Online, the industry job postings are up 2.3 percent over-the-year in third quarter of 2016. Registered Nurses (RNs) account for one in four job postings in the industry. Licensed Practical and Licensed Vocational Nurses (LVNs), Nursing Assistants and Medical Assistants are also among the top 5 most listed positions. This strong demand is reflected in short- and long-term occupational projections, both of which indicate that RNs and LVNs will add the most positions over the coming years.

Health Care and Social Assistance occupations projected to add the most jobs in the long and short term are listed below.

E.Educational Services

Demand for Educational Services will continue to grow in Texas due to an ever-expanding population. From 2010 to 2015, Texas added 2,224,751 people--more than any other state in the nation. During this span, school enrollment for persons three years of age and older jumped by 343,157 students, a 4.8 percent increase. Enrollment growth was even more drastic over 10 years with 1,299,782 students added since 2005, a 20.8 percent increase.

Quarterly Census of Employment and Wage data shows Educational Services employment added 28,509 jobs over five years beginning first quarter 2011, a 22.4 percent gain that puts industry employment at 155,791 jobs for first quarter 2016. The industry is expected to expand by another 21.7 percent from 2014 to 2024 according to the Texas Workforce Commission’s long term industry projections, despite recent HWOL job listings down 16.1 percent over the year for the third quarter 2016 for Educational Services.

TWC’s Occupational projections data estimate that Elementary, Secondary, and Middle School Teachers as well as Educational Administrators for both public and private Texas schools will all increase by 24.6 percent by 2024. In the near term, non-teaching occupations like Instructional Coordinators, Computer User Support Specialists, and Registered Nurses are also in demand.

Educational Services occupations projected to add the most jobs in the long and short term are listed below.

F.Transportation and Warehousing

The Transportation and Warehousing industry grew to an estimated 481,186 positions in first quarter 2016. The industry has averaged 3.6 percent annual growth over the past five years, adding 77,735 jobs. According to long term industry projections, Transportation and Warehousing employment is expected to grow to approximately 561,000 positions by 2024.

Truck Transportation makes up about 30 percent of the overall Transportation and Warehousing industry, and has averaged 4.3 percent annual growth over the past five years. According to Help Wanted Online, Transportation and Warehousing postings are down 22.2 percent over the year in third quarter of 2016. However, job postings for Heavy and Tractor-Trailer Truck Drivers have increased almost 60 percent over the year. Both short- and long-term occupational projections reflect this demand, as Heavy & Tractor-Trailer Drivers and Light Truck or Delivery Services Drivers are expected to add the most positions in the overall Transportation and Warehousing industry over both time frames.

Air Transportation employment grew to approximately 60,600 positions in first quarter 2016 and is poised for continued growth with upcoming expansions at Austin-Bergstrom and Dallas/Fort Worth international airports, among others, near completion. From 2014 to 2024, Airline Pilots, Copilots, and Flight Engineers, Flight Attendants, and Aircraft Mechanics and Service Technicians are expected to add a combined 7,700 positions, long-term occupational projections indicate.

Transportation and Warehousing occupations projected to add the most jobs in the long and short term are listed below.

G.Mining, Quarrying, and Oil and Gas Extraction