Examining The Skills Gap in Wisconsin
Prepared for the Wisconsin Legislative Council
Jennifer Cunha
Megan Loritz
Ben Nerad
Phil Sletten
Presentation Overview
What is the Skills Gap?
● Literature Review
● Indicator Analysis
● Projection Analysis
● Current Policies
● Policy Recommendations
●
What is the Skills Gap?
●
As unemployment remains high, some
employers say it is difficult to find workers with
sufficient skills for available positions
●
Suggests that the supply of skilled workers in
the state does not sufficiently meet the
demand
Literature Review
●
Companies Face Shortage of Trained Workers
•
●
Wage Levels Offered by Employers Too Low
•
•
●
(Sullivan 2012; Competitive Wisconsin 2012 /Be Bold 2 report)
Skills mismatch may be corrected if companies offered higher wages
(Davidson 2012; Holzer 2013*)
Macroeconomic Impacts of Recent Recession
•
•
Weak aggregate demand for products/services insufficient to strain a
companies’ workforce, employers have little incentive to hire
(Levine 2013; Şahin, Song, Topa, Violante 2012; Lazear, Spletzer 2012)
*Holzer explains, but does not necessarily support,
this interpretation.
Wisconsin’s Economy: Economic Indicators
●
Used by economists to analyze the economic
performance and make predictions
●
Indicators may suggest magnitude of a skills gap
using economic theory
●
We explored the following economic indicators:
• Unemployment rates by level of education
• Educational attainment of persons in low-skill jobs
• Occupations with the most projected job openings
Wisconsin’s Economy: Economic Indicators
●
Unemployment rate for college-educated, “skilled”
workers persists at nearly twice its pre-recession rate
Unemployment Rates in Wisconsin by Education Level 2000, 2005, & 2011
Wisconsin’s Economy: Economic Indicators
●
Many Wisconsin college-educated workers are employed in
jobs that require less education than they possess
Educational Attainment of Persons in Wisconsin in Jobs Requiring Less than
a High School Diploma, 2010
Occupation
Retail Salespersons
Bartenders
Telephone Operators
Tellers
% With Some College
or Associate’s Degree
40.80%
43.90%
43.60%
42.80%
% With Bachelor’s
Degree or More
19.30%
12.70%
12.70%
11.40%
Total % With PostSecondary Education
60.10%
56.60%
56.30%
54.20%
Waiters and Waitresses
41.90%
7.00%
48.90%
Taxi Drivers and Chauffeurs
34.40%
12.40%
46.80%
Bus Drivers
34.40%
9.40%
43.80%
Stock Clerks and Order Filers
33.10%
7.00%
40.10%
Cashiers
33.10%
6.10%
39.20%
Wisconsin’s Economy: Economic Indicators
●
Underemployment and over-qualification are relatively
new phenomena in Wisconsin’s labor market
Percent of Jobholders in Low-Skill Occupations Holding Bachelor’s Degrees
or More in Wisconsin, 2000- 2010
Occupation
Retail Salespersons
2000
2010
16.60%
19.30%
Bartenders
7.90%
12.70%
Tellers
8.00%
11.40%
Bus Drivers
6.60%
9.40%
Cashiers
3.40%
6.10%
Economic Indicators: Results
●
●
Economic indicators do not suggest a
skills gap in Wisconsin’s labor force
Educated individuals may continue to
lack job opportunities at skill level
• Almost all of the top 20 occupations with the largest
projected job growth require a high school degree or
less (DWD Projections)
Projection Methods
Demand: DWD Projections
● Supply: Graduates from Wisconsin Institutions
●
• High schools, colleges and universities, GED earners
• Adjusted for estimated migration, workforce participation
• Adjustments for potential anomalies caused by recessions
●
Projections Methods
• Upper and lower bounds, accounts for some uncertainty
• Regression models, percent changes based on previous
years (2000 to 2011)
• Official projections where available (high school)
Projection Analysis
Degree Level
Less than High
School
High School
Some College/
Post Secondary
Non-Degree
Associate’s
Bachelor’s
Master’s
Doctoral or
Professional
Totals
Skilled
Total
Additions to
Projected
Workforce
Job
(2012-2020
Openings
graduates) (2012-2020)
Upper Estimate
Skilled
Additions to
Workforce
(2012-2020
graduates) Lower
Estimate
Skills Gap
Skills Gap
(negative
(negative
indicates
indicates
surplus, or surplus, or no
no Skills
Skills Gap) Gap) - Upper
Lower
Estimates
Estimates
284,000
37,360
13,290
246,640
270,710
378,380
180,890
117,430
197,490
260,950
46,940
282,700
246,010
(235,760)
(199,070)
46,490
132,170
14,740
105,940
269,920
81,950
95,860
234,560
77,580
(59,450)
(137,750)
(67,210)
(49,370)
(102,390)
(62,840)
21,160
20,300
19,820
860
1,340
923,880
979,060
804,550
(55,180)
119,330
Gap in Available Workers By Education
(Deficit or Surplus of Workers)
The Skills Gap
300,000
200,000
100,000
0
Upper
Estimates
-100,000
Lower
Estimates
-200,000
-300,000
Education Level
Implications of Projection Analysis
●
Little evidence of skills gap by education level
●
Slight undersupply of highest educated
• Likely medical doctors and lawyers
●
More high-skill workers than jobs available
• Many job openings at the high school or less level
• Workers with some college or more may not find
jobs to match education level
• Only in aggregate, not for specific skills
Individual Occupation Analysis
●
Skills gaps exist for specific occupations
• Analysis based on high levels of demand, degree specificity
• Included occupations:
1. Registered Nurses
2. General and Operations Managers
3. Hairdressers, Hairstylists, and Cosmetologists
4. Elementary School Teachers
5. Middle and High School Teachers
6. Accountants and Auditors
7. Nursing Aides, Orderlies, and Attendants
8. Human Resources, Labor Relations, and Training
Specialists
9. Computer and Information Systems Workers
Individual Occupation Analysis Results
Middle and High School Teacher Projection Analysis, 2012-2020
No Growth
Scenario
Projection
Annual 2% Decline
Additional Workforce
Entrants, 2012-2020
8,280
7,370
6,670
Projected Openings,
2012-2020
8,330
8,330
8,330
Skills Gap (negative
indicates surplus)
50
960
1,660
Individual Occupation Analysis Results
Human Resources, Labor Relations, and Training Projection
Analysis, 2012-2020
Projection
No Growth
Scenario
Annual 2% Decline
Additional Workforce
Entrants, 2012-2020
3,340
2,530
2,290
Projected Openings,
2012-2020
5,690
5,690
5,690
Skills Gap (negative
indicates surplus)
2,350
3,160
3,400
Individual Occupation Analysis Results
Computer Science and Information Systems Projection
Analysis, 2012-2020
Projection
No Growth
Scenario
Annual 2% Decline
Additional Workforce
Entrants, 2012-2020
6,350
5,610
5,080
Projected Openings,
2012-2020
17,870
17,870
17,870
Skills Gap (negative
indicates surplus)
11,520
12,260
12,790
Current Workforce Development Policies
●
Workforce Training
• Wisconsin Works (W-2) program
• Workforce Investment Act (WIA)
●
Education Programs
• Career and Technical Education (CTE) programs
• Wisconsin Technical College System (WTCS)
• University of Wisconsin System
●
Recent Proposals
• More WTCS and FoodShare recipient funding
• Grants for new employee training
• DWD Labor Market Information System
Policy Recommendations
●
Monitor Projections of the Skills Gap
• Include supply/demand projections in DWD’s Labor Market
Information System
●
Promote a High-Skill Economy
•
•
•
•
●
Commission to explore how state could promote a high-skill economy
Incentivize venture capital and start-ups
Encourage students to get degrees in areas with projected skills gaps
Targeted programming for skills in computer sciences
Ease Transitions to Workforce
• College Scorecard and Labor Market Information System
• Expanded funding for experiential learning programs in high school
• Make it easier for adults to go back to school
Thank You for Your Time
Any Questions?
For further information
Contact the La Follette School’s publications office at
608-263-7657 or publications@lafollette.wisc.edu
Or see
www.lafollette.wisc.edu/publications/workshops.html
Thank you