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Economic Summit XI
The document summarizes labor market trends in Virginia and the Roanoke Valley region from 1999-2014. It finds that while Virginia has experienced a labor shortage, real wages have remained stagnant. The Roanoke Valley specifically has seen real wages fall over time and lag behind the rest of Virginia. Current data shows labor shortages in both Virginia and the Roanoke Valley, which may put upward pressure on wages going forward. The document also projects growing employment in various occupations in the Roanoke region by 2020.
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Economic Summit XI
- 1. Economic Summit XI THEVIRGINIA AND ROANOKE VALLEY LABOR MARKETS ALICE LOUISE KASSENS, PHD JOHN S. SHANNON PROFESSOR OF ECONOMICS ROANOKE COLLEGE
- 2. Outline A look atthe Commonwealth’s economy A look at the local economy Future labor market in Roanoke
- 3. The Commonwealth’s Economy Datasources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations 0.015 0.025 0.035 0.045 0.055 0.065 0.075 0.58 0.6 0.62 0.64 0.66 0.68 0.7 0.72 January-99 July-99 January-00 July-00 January-01 July-01 January-02 July-02 January-03 July-03 January-04 July-04 January-05 July-05 January-06 July-06 January-07 July-07 January-08 July-08 January-09 July-09 January-10 July-10 January-11 July-11 January-12 July-12 January-13 July-13 January-14 LABOR MARKET MOVEMENTS IN VIRGINIA 1999-2014 lfpr epop urate Pre-Great Recession average EPOP: 65.9% Great Recession + average EPOP: 63.8% Pre-Great Recession average u-rate: 3.3% Great Recession + average u-rate: 5.9% Pre-Great Recession average LFPR: 68.2% Great Recession + average LFPR: 67.8%
- 4. The Commonwealth’s Economy Datasources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations LFPR -0.4 ppts. URATE +2.6 ppts. EPOP fell by 2.1 percentage points over the Great Recession and recovery Prolonged job search Dropped out of the labor force
- 5. The Commonwealth’s Economy Source:Virginia Employment Commission March 2014 Supply and demand of labor Shortage of labor in VA Surplus in the US 0.87 March 2014 269,379 March 2014 233,871 March 2014
- 6. The Commonwealth’s Economy 400 500 600 700 800 900 1000 1100 20012002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 WAGES,$/WEEK Weekly Wages Over Time, Virginia Nominal wages Real wages Source: BLS and author’s calculations Note: Real wages adjusted using CPI for Southeast Region (1996=100); wage values assume work 40 hours per week and every week per year; Q1 wages Despite labor shortage in VA, real wages are the same in 2013 as they were in 2007 (~$675/wk.)
- 7. The Commonwealth’s Economy Datasource: U.S. Census Bureau, Center for Economic Studies ; Author’s calculations Note: No distinction between full-, part-time, or temporary hires; no distinction between voluntary and involuntary separations 400 450 500 550 600 650 700 750 800 850 #SEPARATIONS,HIRES(`000) Separations and Hires, Virginia Separations Hires RecoveryRecession Labor flows Cyclical Match quality Productivity
- 8. The Commonwealth’s Economy 400 450 500 550 600 650 700 750 800 850 #SEPARATIONS,HIRES(`000) Separationsand Hires, Virginia Separations Hires RecoveryRecession Labor flows Employment grows & unemployment rate falls when hires exceed separations Data source: U.S. Census Bureau, Center for Economic Studies ; Author’s calculations Note: No distinction between full-, part-time, or temporary hires; no distinction between voluntary and involuntary separations
- 9. The Commonwealth’s Economy Movementsalong the Beveridge Curve Changes in Aggregate Demand Data sources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations y = -0.6056x + 0.0802 R² = 0.8745 0.030 0.035 0.040 0.045 0.050 0.055 0.060 0.065 0.070 0.020 0.030 0.040 0.050 0.060 0.070 0.080 Jobvacencyrate(JO/LF) Unemployment rate Beveridge Curve during the Great Recession
- 10. The Commonwealth’s Economy “Recovery” “Great Recession” Shiftsof the Beveridge Curve Changes in the matching process Data sources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations y = -0.6056x + 0.0802 R² = 0.8745 y = -0.6891x + 0.0988 R² = 0.4381 0.030 0.035 0.040 0.045 0.050 0.055 0.060 0.065 0.070 0.075 0.080 0.020 0.030 0.040 0.050 0.060 0.070 0.080 0.090 Jobvacencyrate(JO/LF) Unemployment rate Beveridge Curve during the Recovery
- 11. The Commonwealth’s Economy “Recovery” “Great Recession” Datasources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations y = -0.6056x + 0.0802 R² = 0.8745 y = -0.6891x + 0.0988 R² = 0.4381 0.030 0.035 0.040 0.045 0.050 0.055 0.060 0.065 0.070 0.075 0.080 0.020 0.030 0.040 0.050 0.060 0.070 0.080 0.090 Jobvacencyrate(JO/LF) Unemployment rate Beveridge Curve during the RecoveryShifts of the Beveridge Curve WHY? Skills mismatch (structural unemployment) Federal EUI
- 12. The Commonwealth’s Economy “Recovery” “Great Recession” Datasources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations y = -0.6056x + 0.0802 R² = 0.8745 y = -0.6891x + 0.0988 R² = 0.4381 0.030 0.035 0.040 0.045 0.050 0.055 0.060 0.065 0.070 0.075 0.080 0.020 0.030 0.040 0.050 0.060 0.070 0.080 0.090 Jobvacencyrate(JO/LF) Unemployment rate Beveridge Curve during the Recovery Long run unemployment rate average for Roanoke MSA = 4.4% (1999-2014) Job opening rate at 4.4% unemployment rate during recession = 5.4% Job opening rate at 4.4% unemployment rate during recovery = 6.8%
- 13. The Commonwealth’s Economy 0 2000 4000 6000 8000 10000 12000 14000 Q199 Q399 Q100 Q300 Q101 Q301 Q102 Q302 Q103 Q303 Q104 Q304 Q105 Q305 Q106 Q306 Q107 Q307 Q108 Q308 Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 #CLAIMS QUARTER/YEAR INITIALUNEMPLOYMENT INSURANCE CLAIMS, VIRGINIA Q1 1999 – Q1 2014 Data sources: US Department of Labor ; Author’s calculations
- 14. The Commonwealth’s Economy Datasources: US Department of Labor ; Author’s calculations 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 Q199 Q399 Q100 Q300 Q101 Q301 Q102 Q302 Q103 Q303 Q104 Q304 Q105 Q305 Q106 Q306 Q107 Q307 Q108 Q308 Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 #CLAIMS CONTINUED UNEMPLOYMENT INSURANCE CLAIMS, VIRGINIA Q1 1999 – Q1 2014
- 15. The Commonwealth’s Economy Elementary (0.7%) SomeHigh School (7%) High School Grad/GED (38.5%) Some College (10.4%) Associate's Degree (16.8%) Bachelor's Degree (15.8%) Post Graduate Degree (6.3%) Unknown (4.6%) EDUCATION STATUS OF MARCH 2013 JOB APPLICANTSN=10,949 Male = 53.4% Under 22 = 9.3% Over 34 = 53.2% Veterans = 7.6% Source: Virginia Employment Commission
- 16. The Local Economy Unemploymentby County March 2014 Roanoke County 4.9% Roanoke City 6.2% Salem City 5.3% Botetourt County 5.3% Craig County 6.2% Franklin County 5.2% Source: Virginia Employment Commission
- 17. The Local Economy Datasources: Virginia Employment Commission, Bureau of Labor Statistics 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 UNEMPLOYMENTRATE Unemployment rate - VA & ROA urate VA urate ROA
- 18. The Local Economy Source:Virginia Employment Commission Note: candidates are those with active resumes in the workforce system $20,000-$34,999 $5,000-$19,999 Not specified $35,000-$49,999 $50,000-64,999 $65,000-$79,999 $80,000-$94,999 $95,000 or more Minimum desired wage of available candidates N=33,360
- 19. The Local Economy Source:Virginia Employment Commission March 2014 Job openings Roanoke City 6,772 Salem 1,935 Roanoke County 556 Franklin County 372 Botetourt County 291 Craig County 18
- 20. The Local Economy -500-400 -300 -200 -100 0 100 200 300 400 500 600 Leisure, hospitality Private eduction, health services Misc. services Local government State government Federal government Mining, lodging Professional business services Wholesale trade Finance, insurance, real estate Transportation, warehousing, utilities Retail trade Manufacturing ROANOKE EMPLOYMENT, Q412-Q413YOY changes +600 jobs +0.4 pp Wages Leisure, hospitality Private educ, health services Source: Virginia Employment Commission. (2014). Virginia Economic Indicators, Vol. 45, Num. 4.
- 21. 5 7 9 11 13 15 17 19 21 23 25 #SEPARATIONS,HIRES(`000) Separations and Hires,Roanoke City Separations Hires Recovery The Local Economy Recession Data source: U.S. Census Bureau, Center for Economic Studies ; Author’s calculations Note: No distinction between full-, part-time, or temporary hires; no distinction between voluntary and involuntary separations Upward trend in each since Q1 2010 Hires currently outpacing separations
- 22. The Local Economy 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 #Unemployed/#Jobopenings Unemployedper Job Opening Roanoke VA unemployed = job openings Labor surplus Labor shortage Labor shortages until early 2009 Labor surpluses until early 2013 More pronounced surpluses in ROA Currently shortages in ROA and VA; upward pressure on wages
- 23. The Local Economy Source:BLS and author’s calculations Note: Real wages adjusted using CPI for Southeast Region (1996=100); wage values assume work 40 hours per week and every week per year; Q1 wages 450 500 550 600 650 700 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 REALWAGES,$/WEEK Real wages VA and Roanoke City, 2001-2013 Roanoke VA Linear (Roanoke) Linear (VA) Roanoke average real wage $512/week Falling by $0.67/year Virginia average real wage $654/week Rising by $3.44/year Wage gap = $142/week Gap grew by ~$4.10 per year between 2001-2013
- 24. The Local Economy Source:BLS and author’s calculations Note: Real wages adjusted using CPI for Southeast Region (1996=100); wage values assume work 40 hours per week and every week per year; Q1 wages 450 500 550 600 650 700 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 REALWAGES,$/WEEK Real wages VA and Roanoke City, 2001-2013 Roanoke VA Linear (Roanoke) Linear (VA) Roanoke average real wage $512/week Falling by $0.67/year Virginia average real wage $654/week Rising by $3.44/year Wage gap = $142/week Gap grew by ~$4.10 per year between 2001-2013 Upward movement?
- 25. The Local Economy WashingtonD.C. $14,362 Richmond $34,964 Lynchburg $43,951 Virginia Beach $32,217 Roanoke $42,120 Sources: http://www.findthebest.com/ with 2013 data; Author’s calculations
- 26. y = -0.4837x+ 0.0644 R² = 0.8434 y = -1.0279x + 0.116 R² = 0.6314 0.020 0.030 0.040 0.050 0.060 0.070 0.020 0.030 0.040 0.050 0.060 0.070 0.080 0.090 Jobopeningrate(JO/LF) Unemployment rate Beveridge Curve, Roanoke MSA Recovery The Local Economy Data sources: Virginia Employment Commission, Bureau of Labor Statistics ; Author’s calculations Recession Long run unemployment rate average for Roanoke MSA = 4.3% (1999-2014) Job opening rate at 4.3% unemployment rate during recession = 4.4% Job opening rate at 4.3% unemployment rate during recovery = 7.2%
- 27. Future Labor Market 541,884 414,390 294,938 257,351 234,584 254,349 199,506 226,602 197,026 191,430 613,286 472,738 340,905 317,155 290,152 275,909 267,482 257,639 243,212 240,333 OFFICEAND ADMINISTRATIVE SUPPORT OCCUPATIONS SALES AND RELATED OCCUPATIONS FOOD PREPARATION AND SERVING RELATED OCCUPATIONS BUSINESS AND FINANCIAL OPERATIONS OCCUPATIONS EDUCATION, TRAINING, AND LIBRARY OCCUPATIONS MANAGEMENT OCCUPATIONS COMPUTER AND MATHEMATICAL OCCUPATIONS TRANSPORTATION AND MATERIAL MOVING OCCUPATIONS CONSTRUCTION AND EXTRACTION OCCUPATIONS HEALTHCARE PRACTITIONERS AND TECHNICAL OCCUPATIONS EMPLOYMENT PROJECTIONS (2020), ROANOKE 2010 Estimate 2020 Projection $37,130 $20,310 $60,190 $49,010 $90,110 $67,570 $31,580 $34,500 $73,960 $32,220 Data sources: Virginia Employment Commission, Bureau of Labor Statistics Note: salaries are mean annual wage, May 2013, Roanoke
- 28. Future Labor Market Labor demand Output Realwage L and K substitutability
- 29. Future Labor Market Labor demand Output Realwage L and K substitutability
- 30. Future Labor Market Labor demand Output Realwage L and K substitutability
- 31. Future Labor Market Labor demand Output Realwage L and K substitutability Computers strongly complement non-routine cognitive tasks (high wage) Abstract reasoning tasks (problem solving, coordination, or other high management jobs)
- 32. Future Labor Market Labor demand Output Realwage L and K substitutability Computers directly substitute for routine tasks (middle-class) Bookkeeping, clerical work, repetitive production tasks Automation of routine work
- 33. Future Labor Market Labor demand Output Realwage L and K substitutability Computers have little direct impact on non-routine manual tasks (low income) Janitors, security guards, truck drivers, waiters
- 34.
Editor's Notes
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- #6 JOLTS: Nationwide the JO/U was
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