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STATE OF WORKFORCE REPORT XI:

Southwest AlabamaWorks

MAY 2017

Center for Business and Economic ResearchCulverhouse College of Commerce

University of Alabama Center for Economic Development

Institute for Social Science Research

i State of the Workforce Report: Southwest AlabamaWorks Center for Business and Economic Research

MAY 2017

Produced by:

Samuel Addy, Ph.D., Sr. Res. Economist & Assoc. Dean for Economic Development OutreachKilungu Nzaku, Ph.D., Assistant Research Economist

Ahmad Ijaz, Executive Director & Director of Economic ForecastingSarah Cover, Economic Forecaster

Viktoria Riiman, Socioeconomic AnalystArben Skivjani, Economic Forecaster

Susannah Robichaux, Socioeconomic Analyst Morgan Tatum, Project Coordinator

Katie Howard, Senior Graphic Designer

Center for Business and Economic ResearchCulverhouse College of Commerce

The University of AlabamaBox 870221, Tuscaloosa, AL 35487-0221

Tel: (205) 348-6191 | Fax: (205) [email protected]

Dissemination: Nisa Miranda, Director, University of Alabama Center for Economic Development

Underemployment Survey: Debra McCallum, Research Social Scientist and Director of the Capstone Poll

Michael Conaway, Project Coordinator for the Capstone Poll Institute for Social Science Research

Center for Business and Economic Research State of the Workforce Report: Southwest AlabamaWorks ii

ACKNOWLEDGMENTS

Completion of this project was due to the timely contributions of many people. We are very grateful to the Labor Market Information (LMI) Division of the Alabama Department of Labor (ADOL). In addition to financial support from ADOL, LMI provided significant staff time and this report would not have been possible without large amounts of data from LMI.

Many thanks also to our colleagues at the Center for Business and Economic Research, the Capstone Poll, the Institute for Social Science Research, and the University of Alabama Center for Economic Development for their help on various phases of this research project. Last, but not least, much gratitude is owed to the thousands of Alabamians who responded to the extensive survey on the state’s workforce and related issues, as well as to the community and industry leaders whose work on these issues provides the critical data required in reports of this kind.

Funding for this project was provided by:

Workforce Development Division, Alabama Department of CommerceAlabama Industrial Development Training

Alabama Department of LaborAlabama Department of Postsecondary Education

The University of Alabama

iii State of the Workforce Report: Southwest AlabamaWorks Center for Business and Economic Research

CONTENTS

Acknowledgments ii

Summary iv

Labor Utilization and Supply Flowsvi

Workforce Supply 1Labor Force Activity 1Commuting Patterns 3Population 3Per Capita Income 6Educational Attainment 6Underemployment and Available Labor 7

Workforce Demand 11Industry Mix 11Job Creation and Net Job Flows 12High-Demand, Fast-Growing, High-Earning, and Sharp-Declining Occupations 13Skills and Skills Gap Analyses 17Education and Training Issues 20

Implications and Recommendations 23

Center for Business and Economic Research State of the Workforce Report: Southwest AlabamaWorks iv

SUMMARY• This report analyzes workforce supply and demand issues using available metrics of workforce

characteristics for Southwest AlabamaWorks workforce region and presents implications and recommendations.

• Southwest AlabamaWorks had a 6.2 percent unemployment rate in March 2017, with 20,048 unemployed workers. An underemployment rate of 23.7 percent for 2016 implies that the region has an available labor pool of 92,301 that includes 72,253 underemployed workers who are looking for better jobs and are willing to commute longer times and distances for such jobs.

• The regional commuting patterns increased from a net out-commuting of 10,243 people in 2005 to a net out-commuting of 18,604 residents in 2014. In 2016 commute time and distance dropped from 2015, implying that congestion eased in the region. However, congestion could worsen as the economy recovers from the last recession. This means continuous maintenance and development of transportation infrastructure and systems is necessary to avoid slowing economic development.

• By sector the top five employers in the region are retail trade, health care and social assistance, manufacturing, accommodation and food services, and educational services. In the first quarter of 2016, these five industries provided 160,701 jobs, 58.7 percent of the regional total. One of these leading employers paid more than the region’s $3,362 monthly average wage. Economic development should continue to diversify and strengthen the region’s economy by retaining, expanding, and attracting more high-wage providing industries. Workforce development should also focus on preparing workers for these industries.

• On average 14,434 jobs were created per quarter from second quarter 2001 to first quarter 2016, and quarterly net job flows averaged 1,343. Job creation is the number of new jobs that are created either by new businesses or through expansion of existing firms. Net job flows reflect the difference between current and previous employment at all businesses.

• The top five high-demand occupations are Registered Nurses; Customer Service Representatives; General and Operations Managers; Cooks, Restaurant; and Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products.

• The top five fast-growing occupations are Engine and Other Machine Assemblers; Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic; Occupational Therapy Assistants; Physical Therapist Assistants; and Physical Therapists.

• The top 50 high-earning occupations are in management, health, and engineering fields and pay a minimum salary of $85,727. Eight of the top 10 occupations are health jobs.

• Of the top 40 high-demand, 20 fast-growing, and 50 high-earning occupations, no occupation belongs in all three categories. Nine occupations are both high-demand and fast-growing, and nine additional jobs are both high-earning and in high-demand.

v State of the Workforce Report: Southwest AlabamaWorks Center for Business and Economic Research

• Of the region’s 736 occupations, 65 are expected to decline over the 2014 to 2024 period, with 20 occupations expected to sharply decline by at least six percent with each losing a minimum of 20 jobs. Education and training for these 20 occupations should slow accordingly.

• Skill and education requirements for jobs keep rising. Educational and training requirements of high-demand, fast-growing, and high-earning occupations demonstrate the importance of education in developing the future workforce. In the future, more jobs will require postsecondary education and training at a minimum.

• The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs indicates a strong need for training in these skills. For Southwest AlabamaWorks both the pace and scale of training needs to increase for basic and social skills. Ideally, all high school graduates should possess basic skills so that postsecondary and higher education can focus on other and more complex skills. Employers should be an integral part of planning for training, as they can help identify future skill needs and any existing gaps.

• From a 2014 base, worker shortfalls of about 34,800 for 2024 and 44,700 for 2030 are expected. By 2040 worker shortfall will reach 46,300. This will demand a focus on worker skills and shortfalls through 2040. Worker shortfalls for critical occupations will also need to be continuously addressed. Strategies to address skill needs and worker shortfalls might include (1) improving education and its funding; (2) introducing economic opportunities that attract new and younger residents; (3) lowering the high school dropout rate; (4) focusing on hard-to-serve populations (e.g. out-of-school youth); (5) continuing and enhancing programs to assess, retrain, and place dislocated workers; (6) encouraging older worker participation in the labor force; and (7) facilitating in-commuting.

• Improving education is important because (i) a highly educated and productive workforce is a critical economic development asset; (ii) productivity rises with education; (iii) educated people are more likely to work; and (iv) it yields high private and social rates of return on investment. Workforce development must view all types of education and other programs (e.g. adult education, career technical training, worker retraining, career readiness, etc.) as one system. Funding to support workforce development may require tax reform at state and local levels and should provide flexibility as workforce needs and priorities change over time. Publicizing both private and public returns to education can encourage individuals to raise their own educational attainment levels, while also promoting public and legislative support for education.

• The higher incomes that come with improved educational attainment and work skills will help to increase personal income for the region as well as raise additional local (county and city) tax revenues. This is important, especially for a region that has above average population and labor force growth rates and below average per capita income.

• Together, workforce development and economic development can build a strong, well-diversified Southwest AlabamaWorks economy. Indeed, one cannot achieve success in one without the other.

Center for Business and Economic Research State of the Workforce Report: Southwest AlabamaWorks vi

Labor Utilization and Supply Flows

1 Addy, S.N., Bonnal, M., and Lira, C. (2012). Towards a More Comprehensive Measure of Labor Underutilization: The Alabama Case, Business Economics, vol. 47(3) .2 Canon, M.E., Kudlyak, M., and Reed, M. (2014). Not Everyone Who Joins the Ranks of the Employed was “Unemployed”, The Regional Economist, January.

The chart above presents labor utilization and supply flows that explain labor market dynamics in view of recent study findings. The civilian non-institutional population age 16 and above is comprised of participants in the labor force and nonparticipants. The labor force is made of employed and unemployed persons; the unemployed do not have a job but are actively searching for work. Employed persons include fully employed and underemployed persons in all categories of work (full-time, voluntary part-time, and involuntary part-time). Nonparticipants in the labor force include retirees (voluntary and involuntary), people who do not want to or cannot work for various reasons (e.g., disability, caring for family members, in school or training, etc.), discouraged workers, and other labor force reserves. It has been suggested that a subgroup of nonparticipants referred to as the “waiting group” is more likely than the rest of the nonparticipants to take a job if wages and conditions are satisfactory, but they do not actively search for work. New evidence has shown that between January 2003 and August 2013, the flow of nonparticipants into employment was 1.6 times that of unemployed persons transitioning into employment, which may be due to the presence of the waiting group1, 2. Nonparticipant flows to employment are larger in services, management, and professional occupations while unemployed flows to employment are higher in physically intensive occupations such as construction workers and miners. Industry effects should vary by the type and number of occupations they contain. This finding enhances the common understanding of labor market dynamics and influences workforce availability and skills gap analyses.

Source: Addy et al1 and Canon et al2

1 State of the Workforce Report: Southwest AlabamaWorks Center for Business and Economic Research

Workforce SupplyLabor Force Activity

The labor force includes all persons in the civilian noninstitutional population, age 16 and over, who have a job or are actively looking for one. Typically, those who have no job and are not looking for one are not included (e.g. students, retirees, discouraged workers, and the disabled). Table 7.1 shows labor force information for Southwest AlabamaWorks and its nine counties for 2016 and March 2017. Alabama labor force information is available from the Labor Market Information (LMI) Division of the Alabama Department of Labor. LMI compiles data in cooperation with the U.S. Bureau of Labor Statistics.

Table 7.1 Southwest AlabamaWorks Labor Force Information

2016 Annual Average Labor Force Employed Unemployed Rate (%)

Baldwin 89,931 85,061 4,870 5.4Choctaw 4,300 3,918 382 8.9Clarke 8,011 7,118 893 11.1Conecuh 4,593 4,197 396 8.6Escambia 14,633 13,648 985 6.7Mobile 185,092 172,376 12,716 6.9Monroe 7,281 6,600 681 9.4Washington 6,776 6,184 592 8.7Wilcox 2,809 2,396 413 14.7Southwest 323,426 301,498 21,928 6.8Alabama 2,168,608 2,038,775 129,833 6.0United States 159,187,000 151,436,000 7,751,000 4.9

March 2017Labor Force Employed Unemployed Rate (%)

Baldwin 91,169 86,762 4,407 4.8Choctaw 4,306 3,970 336 7.8Clarke 7,967 7,199 768 9.6Conecuh 4,498 4,159 339 7.5Escambia 14,718 13,843 875 5.9Mobile 185,914 174,152 11,762 6.3Monroe 7,237 6,610 627 8.7Washington 6,800 6,255 545 8.0Wilcox 2,818 2,429 389 13.8Southwest 325,427 305,379 20,048 6.2Alabama 2,186,599 2,069,412 117,187 5.4United States 159,912,000 152,628,000 7,284,000 4.6

Note: Not seasonally adjusted.Source: Alabama Department of Labor and U.S. Bureau of Labor Statistics.

Center for Business and Economic Research State of the Workforce Report: Southwest AlabamaWorks 2

The recession that began in 2007 increased the number of unemployed and sharply raised county unemployment rates. The unemployment rates have trended downwards since 2010 and ranged from 5.4 percent to 14.7 percent for 2016, with an average of 6.8 percent for the region. In March 2017, the unemployment rates ranged from 4.8 percent and 13.8 percent, with 6.2 percent for the region. The unemployment rate was lowest in Baldwin County and highest in Wilcox. In Southwest AlabamaWorks, only Baldwin County had an unemployment rate below Alabama’s 5.4 percent.

Annual unemployment rates for 2000 to 2016 are shown in Figure 7.1. The region’s unemployment rate was low before the 2001 and the last recessions. The 2003 high of 6.9 percent was because of the national economic recession of 2001. Employment gains resulting from successful state and local economic development efforts brought unemployment down significantly in 2006 and 2007. However, the 2007 recession raised unemployment to double digit rates in 2009 through 2011 before declining to 6.8 in 2016. Year-to-date monthly labor force data point to a slightly lower regional unemployment rates for 2017. However, the slow pace of economic recovery and structural changes in the economy will keep unemployment relatively high for a few more years.

Table 7.2 shows worker distribution by age in Southwest AlabamaWorks for the first quarter of 2016. The region’s workforce is slightly older than that of Alabama. Older workers, age 55 and over, are 22.1 percent of the region’s nonagricultural employment versus the state’s 21.3 percent. Those who are age 65 and over constitute 5.4 percent compared to 5.1 percent for Alabama. Labor force participation of younger residents must increase to meet long term occupational projections for growth and replacement, or older workers may have to work longer.

Figure 7.1 Southwest AlabamaWorks Unemployment Rate

Source: Alabama Department of Labor.

Figure 7.2 Southwest AlabamaWorks Nonagricultural Employment

Source: Alabama Department of Labor.


Table 7.2 Workers by Age Group (First Quarter 2016)

Nonagricultural EmploymentAge Group Number Percent

14-18 5,258 1.919-24 29,860 10.925-34 58,647 21.435-44 59,526 21.745-54 59,884 21.955-64 45,911 16.8

65+ 14,678 5.455 and over total 60,589 22.1

Total all ages 273,764 100.0

Note: Rounding errors may be present. Nonagricultural employment is by place of work, not residence. Source: U.S. Census Bureau, Local Employment Dynamics Program.

Commuting Patterns

The number of workers who commute out of Southwest AlabamaWorks exceeds the number that commute into the region (Table 7.3). In 2014 net out-commuting reached 18,604 rising from 10,243 in 2005. Mobile County had the largest number of commuters in the region. Table 7.3 also shows that average commute times and distances were down for workers in 2016 from 2015. This implies that congestion eased although it is likely to increase as the regional economy recovers from the last recession, particularly in the Mobile and Daphne-Fairhope-Foley metropolitan areas. Thus, regional transportation infrastructure and systems must be maintained and developed to ensure that the flow of goods and movement of workers are not interrupted. Slowing the movement of goods and workers can slow economic development.

Population

From 2000 to 2010, the population in Southwest AlabamaWorks grew from 692,180 to 738,815, a 6.7 percent increase (Table 7.4). This growth was less than the state’s 7.5 percent. Baldwin experienced the region’s largest population growth, while Choctaw County saw the largest population decline. From 2010 to 2016, Southwest AlabamaWorks’ population grew 2.9 percent, faster than the state’s growth of 1.7 percent. However, most of the growth was in Baldwin County, as Mobile gained less than one percent and the other counties had population decline.

Table 7.5 shows Southwest AlabamaWorks’ population counts, estimates, and projections by age group. The population aged 65 and over has been growing rapidly since 2010 as the first of the baby boom generation turned 65 in 2011. Consequently, growth of the prime working age group (20-64) and youth (0-19) will soon lag that of the total population. Indeed, from a 2014 base the prime working population will decline through 2030 and only shows positive growth by 2040. This poses a challenge for workforce development. If employment growth outpaces labor force growth in the long term, communities that experience rapid job gains may need to consider investments in amenities and infrastructure to attract new residents.


Table 7.3 Southwest AlabamaWorks Commuting Patterns

Year Southwest Inflow Southwest Outflow2005 24,139 34,3822006 24,415 38,3882007 29,181 43,2572008 33,237 44,2362009 32,346 47,6492010 33,351 50,9262011 33,614 51,5452012 32,588 50,9342013 34,061 53,5392014 36,042 54,646

Southwest CountiesInflow, 2014 Outflow, 2014

Number Percent Number PercentBaldwin 21,667 25.3 33,950 32.6Choctaw 1,519 1.8 2,409 2.3Clarke 3,704 4.3 6,133 5.9Conecuh 1,801 2.1 3,327 3.2Escambia 5,489 6.4 6,923 6.6Mobile 45,475 53.2 37,574 36.1Monroe 3,146 3.7 4,676 4.5Washington 1,603 1.9 6,797 6.5Wilcox 1,101 1.3 2,324 2.2 Percent of WorkersAverage commute time (one-way) 2015 2016

Less than 20 minutes 48.5 48.620 to 40 minutes 27.0 29.840 minutes to an hour 10.4 8.0More than an hour 4.3 4.8

Average commute distance (one-way) 2015 2016Less than 10 miles 41.4 42.010 to 25 miles 32.6 35.925 to 45 miles 13.6 13.0More than 45 miles 7.7 6.7

Note: Rounding errors may be present. Source: U.S. Census Bureau; Alabama Department of Labor; and Center for Business and Economic Research, The University of Alabama.


Table 7.4 Southwest AlabamaWorks Population

1990 Census

2000 Census

2010 Census

2016 Estimate

Change 2000-2010

% change 2000-2010

Change 2010-2016

% change 2010-2016

Baldwin 98,280 140,415 182,265 208,563 41,850 29.8 26,298 14.4Choctaw 16,018 15,922 13,859 12,993 -2,063 -13.0 -866 -6.2Clarke 27,240 27,867 25,833 24,392 -2,034 -7.3 -1,441 -5.6Conecuh 14,054 14,089 13,228 12,395 -861 -6.1 -833 -6.3Escambia 35,518 38,440 38,319 37,728 -121 -0.3 -591 -1.5Mobile 378,643 399,843 412,992 414,836 13,149 3.3 1,844 0.4Monroe 23,968 24,324 23,068 21,530 -1,256 -5.2 -1,538 -6.7Washington 16,694 18,097 17,581 16,756 -516 -2.9 -777 -4.4Wilcox 13,568 13,183 11,670 10,986 -1,513 -11.5 -684 -5.9Southwest 623,983 692,180 738,815 760,179 46,635 6.7 21,364 2.9Alabama 4,040,587 4,447,100 4,779,736 4,863,300 332,636 7.5 83,564 1.7United States 248,709,873 281,421,906 308,745,538 323,127,513 27,323,632 9.7 14,381,975 4.7

Source: Center for Business and Economic Research, The University of Alabama and U.S. Census Bureau.

Table 7.5 Southwest AlabamaWorks Population by Age Group and 2040 Projections

Age Group 2000 2010 2014 2024 2030 2035 20400-19 205,052 200,699 193,111 196,960 198,265 199948 203,892

20-24 43,968 46,087 49,999 47,633 47,848 49967 50,51625-29 44,562 45,828 47,706 46,435 46,759 47395 49,79530-34 44,902 44,949 46,557 46,796 47,544 48366 49,25035-39 51,690 46,127 44,503 44,996 48,618 48982 50,13440-44 53,795 47,046 47,336 47,219 45,744 50096 50,77245-49 48,368 53,397 47,368 46,769 48,565 46819 51,53550-54 43,767 54,779 54,114 47,447 47,380 49498 47,82055-59 35,576 49,174 53,423 48,769 48,029 48181 50,57160-64 29,904 44,013 47,076 53,422 48,031 48610 48,999

65+ 90,596 106,716 122,591 160,762 183,350 191,914 197,80620-64 Total 396,532 431,400 438,082 429,486 428,518 437,914 449,392

Total Population 692,180 738,815 753,784 787,208 810,133 829,776 851,090Change from 2014

0-19 2.0% 2.7% 3.5% 5.6%20-64 -2.0% -2.2% 0.0% 2.6%

Total Population 4.4% 7.5% 10.1% 12.9%


Southwest CountiesInflow, 2014 Outflow, 2014

Number Percent Number PercentBaldwin 21,667 25.3 33,950 32.6Choctaw 1,519 1.8 2,409 2.3Clarke 3,704 4.3 6,133 5.9Conecuh 1,801 2.1 3,327 3.2Escambia 5,489 6.4 6,923 6.6Mobile 45,475 53.2 37,574 36.1Monroe 3,146 3.7 4,676 4.5Washington 1,603 1.9 6,797 6.5Wilcox 1,101 1.3 2,324 2.2


Per Capita Income

Per capita income (PCI) in Southwest AlabamaWorks was $35,833 in 2015 (Figure 7.3), up 30.3 percent from 2005, but even with this increase, the region’s PCI was $2,197, or 5.8 percent, below the state average of $38,030. County PCI are shown in Figure 7.4. Baldwin County had the highest PCI with $40,121 followed by Mobile at $35,348. Wilcox County had the lowest PCI with $28,128.

Educational Attainment

Educational attainment in 2011 to 2015 of Southwest AlabamaWorks residents who were 25 years old and over is shown in Table 7.6 and Figures 7.5 and 7.6. About 85.3 percent graduated from high school, and 21.9 percent held a bachelor’s or higher degree. Baldwin County had higher educational attainment than the other eight counties and the state. Educational attainment is important since skills rise with education and high-wage jobs for the 21st century demand more skill sets.

Figure 7.3 Southwest AlabamaWorks Per Capita Income

Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama.

Figure 7.4 County Capita Income, 2015

Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama.

Figure 7.5 High School Graduate or Higher, 2011-2015

Source: Center for Business and Economic Research, The University of Alabama and American Community Survey, U.S. Census Bureau.

Figure 7.6 Bachelor’s Degree or Higher, 2011-2015

Source: Center for Business and Economic Research, The University of Alabama and American Community Survey, U.S. Census Bureau.


Underemployment and Available Labor

Labor force data are often limited to information on the employed and the unemployed that is available from government sources. However, this information is not complete from the perspective of employers. New or expanding employers are also interested in underemployment because current workers are potential employees. In fact, experience requirements in job ads are evidence that many prospective employers look beyond the unemployed for workers.

Workers in occupations that underutilize their experience, training, and skills are underemployed. These workers might look for other work because their current wages are below what they believe they can earn or because they wish to not be underemployed. Underemployment occurs for various reasons including (i) productivity growth, (ii) spousal employment and income, and (iii) family constraints or personal preferences. Underemployment is unique in different areas because of the various contributing factors combined with each area’s economic, social, and geographic characteristics.

The existence of underemployment identifies economic potential that is not being realized. It is extremely difficult to measure this economic potential because of uncertainties regarding additional income that the underemployed can bring to an area. It is clear, however, that underemployment provides opportunities for selective job creation and economic growth. A business that needs skills prevalent among the underemployed could locate in areas with such workers, regardless of the local unemployment rates. A low unemployment rate, which may falsely suggest limited labor availability, is therefore not a hindrance to the business.

The underemployed present a significant labor pool because they tend to respond to job opportunities that they believe are better for reasons that include (i) higher income, (ii) more benefits, (iii) superior terms and conditions of employment, and (iv) a better match with skills, training, and experience. The underemployed also create opportunities for entry level workers as they leave lower-paying jobs for better-paying ones. Even if their previously held positions are lost or not filled

Table 7.6 Educational Attainment of Population 25 Years and Over, 2011-2015

Baldwin Choctaw Clarke Conecuh Escambia Mobile Monroe Washington Wilcox SouthwestTotal 137,001 9,534 17,128 8,905 26,007 273,199 14,913 11,508 7,399 505,594

No schooling completed 882 168 242 160 309 4,104 346 54 215 6,480

Nursery to 4th grade 403 104 90 38 173 667 39 96 37 1,6475th and 6th grade 917 124 187 153 189 1,724 142 86 120 3,6427th and 8th grade 2,183 381 294 307 1,067 5,079 435 440 145 10,331

9th grade 2,203 210 361 263 767 5,839 409 244 159 10,45510th grade 2,936 319 576 332 1,184 7,928 612 492 253 14,63211th grade 2,901 643 1,009 416 1,078 9,517 543 591 425 17,123

12th grade, no diploma 1,935 301 580 282 473 5,372 331 239 321 9,834High school graduate/equivalent 39,431 3,512 7,515 3,962 10,942 89,651 6,664 5,310 3,058 170,045

Some college, less than 1 year 8,458 630 788 518 1,406 16,592 672 589 409 30,062Some college, 1+ years,

no degree 22,622 1,307 2,066 1,114 3,448 45,982 1,708 1,376 897 80,520

Associate degree 12,420 709 1,203 628 1,710 20,739 1,186 850 436 39,881Bachelor’s degree 26,388 701 1,440 400 2,178 39,950 1,200 775 596 73,628

Master’s degree 9,344 335 534 270 793 14,200 449 289 207 26,421Professional school degree 2,567 80 154 52 214 3,512 66 74 96 6,815

Doctorate degree 1,411 10 89 10 76 2,343 111 3 25 4,078



(perhaps due to low unemployment or adverse economic conditions), there is economic growth in gaining higher-paying jobs. Such income growth boosts consumption, savings, and tax collections. Quantifying the size of the underemployed is a necessary first step in considering this group for economic development, workforce training, planning, and other purposes. It is important to note that the underemployed can take on more responsibilities and earn more income, but they cannot be counted on to address possible future worker shortages as they are already employed.

Southwest AlabamaWorks had an underemployment rate of 23.7 percent in 2016. Applying this rate to March 2017 labor force data means that 72,253 employed residents were underemployed (Table 7.7). Adding the unemployed gives a total available labor pool of 92,301 for the region. This is 4.6 times the number of unemployed and is a more realistic measure of the available labor pool in the region. Prospective employers must be able to offer the underemployed higher wages, better benefits or terms of employment, or some other incentives to induce them to change jobs. County underemployment rates ranged from 19.1 percent for Washington County to 28.6 percent for Wilcox. Mobile County had the largest available labor pool while Wilcox had the smallest. The underemployed are more willing to commute longer times and distances for a better job. For the one-way commute, 46.6 percent are prepared to travel for 20 or more minutes longer and 38.8 percent will go 20 or more extra miles. In comparison, 42.3 percent of all workers are willing to travel for 20 or more minutes and 34.1 percent are prepared for 20 or more extra miles.

Underemployment rates for counties, AlabamaWorks regions, and the state were determined from an extensive survey of the state’s workforce. In 2016 a total of 1,020 complete responses were obtained from Southwest AlabamaWorks. Fifty-three percent (541 respondents) were employed, of whom 128 respondents stated that they were underemployed. The primary reasons given for being underemployed are low wages at the available jobs; a lack of job opportunities in their area; living too far from jobs; other family or personal obligations; owning a house in their area; child care responsibilities; and a spouse having a really good job. Ongoing economic development efforts can help in this regard. Nonworkers list retirement and disability or other health concerns as the main reasons for their status, but some also cite a lack of job opportunities in their area and social security limitations as additional key factors. Such workers may become part of the labor force if their problems can be addressed. Indeed, a recent study found that the flow of labor force nonparticipants to employment status was 60.0 percent more than that of unemployed workers who gained employment.3 This implies that available labor pool in Southwest AlabamaWorks could be larger than estimated in this report.

Table 7.7 Underemployed and Available Labor by County

Southwest Baldwin Choctaw Clarke Conecuh EscambiaLabor Force 325,427 91,169 4,306 7,967 4,498 14,718Employed 305,379 86,762 3,970 7,199 4,159 13,843Underemployment rate 23.7% 21.9% 25.0% 23.9% 26.2% 23.4%Underemployed workers 72,253 19,018 993 1,721 1,089 3,239Unemployed 20,048 4,407 336 768 339 875Available labor pool 92,301 23,425 1,329 2,489 1,428 4,114

Mobile Monroe Washington WilcoxLabor Force 185,914 7,237 6,800 2,818Employed 174,152 6,610 6,255 2,429Underemployment rate 23.2% 24.4% 19.1% 28.6%Underemployed workers 40,351 1,612 1,192 694Unemployed 11,762 627 545 389Available labor pool 52,113 2,239 1,737 1,083

Note: Rounding errors may be present. Based on March 2017 labor force data and 2016 underemployment rates.Source: Center for Business and Economic Research, The University of Alabama and Alabama Department of Labor.

3 Canon, M.E., Kudlyak, M., and Reed, M. (2014). Not Everyone Who Joins the Ranks of the Employed was “Unemployed”, The Regional Economist, January.


A comparison of underemployed workers to the overall workforce in Southwest AlabamaWorks shows that:• Fewer work full-time and more of the part-timers would like to work full-time.• More hold multiple jobs.• They have longer commute times and distances. • They have shorter job tenure than other employees and they earn less.• More work in legal; food preparation and service; building and grounds cleaning and maintenance; office and

administrative support; sales and related; farming, fishing, and forestry; arts, design, entertainment, sports, and media; and installation, maintenance, and repair occupations.

• More are in agriculture, forestry, fishing, and hunting; retail trade; mining; information; administrative and support and waste management and remediation services; educational services; accommodation and food services; and other services industries.

• Fewer believe their jobs fit well with their education and training, skills, and experience.• More believe they are qualified for a better job.• More would leave their current jobs for higher income.• For a better job, more are willing to extend their commute time and distance.• Fewer are satisfied with their current jobs.• More have sought better jobs in the preceding quarter.• More are willing to train for a better job even if they must pay all the training cost.• More are females and their median age (51) is a year lower than that of all workers.• Their marital status as the same as that of all workers.• More have postgraduate degrees. • More are African-American or other nonwhite ethnic groups.

Table 7.8 shows the detailed survey results on job satisfaction and willingness to train. Responses for overall job satisfaction as well as various aspects of the job were obtained. In general, most of the region’s workers (76.2 percent) are satisfied or completely satisfied with their jobs. Workers are most satisfied with the work they do and least satisfied with the earnings they receive. Fewer of the underemployed workers are satisfied with their jobs (55.5 percent). The underemployed are most satisfied with their work shift, but extremely dissatisfied with their earnings.

Workers are generally willing to train for a new or better job, with the underemployed being much more willing (69.0 percent vs. 59.0 percent). However, the willingness to train is strongly influenced by who pays for the cost of training. Workers typically do not wish to pay for the training and so their willingness is highest when the cost is fully borne by government and lowest when the trainee must pay the full costs. Underemployed workers are more willing to train for the new or better job even if they have to bear the full cost of training. The results show that workers expect the government to bear at least a part of the training cost. This expectation may result from worker awareness of government workforce programs that provide such assistance.


Table 7.8 Job Satisfaction and Willingness to Train (Percent)

Job Satisfaction

Completely Dissatisfied Dissatisfied Neutral Satisfied Completely

SatisfiedEmployed Overall 4.6 2.0 16.8 27.4 48.8

Earnings 10.5 11.7 20.3 22.7 34.6Retention 3.5 4.6 10.7 17.6 61.9Work 1.3 2.2 9.2 21.1 66.2Hours 3.9 4.3 10.0 18.9 62.9Shift 3.3 2.8 8.0 17.6 67.8

Conditions 2.8 4.3 12.8 25.7 54.0Commuting Distance 4.8 5.0 11.8 12.8 65.1

Underemployed Overall 12.5 4.7 27.3 24.2 31.3

Earnings 25.8 16.4 26.6 17.2 14.1Retention 10.9 7.0 19.5 19.5 47.7Work 3.9 4.7 17.2 23.4 50.8Hours 11.7 5.5 14.1 16.4 51.6Shift 6.3 3.9 13.3 22.7 53.9Conditions 6.3 7.0 14.8 25.8 44.5Commuting Distance 10.9 5.5 12.5 16.4 54.7

Willingness to Train Completely

Unwilling Unwilling Neutral Willing Completely Willing

Employed For a new or better job 25.4 3.2 11.7 11.9 47.1

If paid by trainee 41.4 21.5 21.5 5.5 7.1If paid by trainee and government 12.3 11.0 32.8 21.8 19.9If paid by government 3.1 1.8 8.3 13.5 72.7

Underemployed For a new or better job 17.2 4.3 9.5 13.8 55.2

If paid by trainee 36.5 19.8 21.9 7.3 9.4If paid by trainee and government 12.5 6.3 27.1 22.9 28.1If paid by government 3.1 0.0 7.3 11.5 78.1

Note: Rounding errors may be present. Source: Center for Business and Economic Research, The University of Alabama.


Industry Mix

Since industry data for the new AlabamaWorks regions are not yet available, county employment numbers were aggregated to obtain regional industry employment. Average wages were derived using total wage aggregates. The retail trade sector was the leading employer with 39,658 jobs in the first quarter of 2016 (Table 7.9). Rounding out the top five industries by employment are health care and social assistance; manufacturing; accommodation and food services, and educational services. These five industries provided 160,701 jobs, 58.7 percent of the regional total. The average monthly wage across all industries in the region was $3,362; only one of the five leading employers paid more than this average but it was not the highest paying sector. The highest average monthly wages were for mining at $6,647; utilities at $5,539; manufacturing at $5,129; professional, scientific, and technical services at $4,794; and wholesale trade with $4,764. Accommodation and food services paid the least at $1,472.

By broad industry classification, service providing industries generated 77.2 percent of jobs in the first quarter of 2016 (Figure 7.7). Goods producing industries were next with 18.2 percent, and public administration accounted for 4.6 percent. The distribution is for all nonagricultural jobs in the region, but there is significant variation by county.

Workforce Demand

Table 7.9 Industry Mix (First Quarter 2016)

Industry by 2-digit NAICS Code Total Employment Share Rank Average

Monthly Wage11 Agriculture, Forestry, Fishing and Hunting 2,752 1.01% 16 $3,077 21 Mining 655 0.24% 20 $6,647 22 Utilities 2,718 0.99% 17 $5,539 23 Construction 15,389 5.62% 7 $3,790 31-33 Manufacturing 30,998 11.33% 3 $5,129 42 Wholesale Trade 10,862 3.97% 11 $4,764 44-45 Retail Trade 39,658 14.49% 1 $2,303 48-49 Transportation and Warehousing 11,552 4.22% 10 $3,861 51 Information 2,600 0.95% 18 $4,208 52 Finance and Insurance 8,313 3.04% 12 $4,565 53 Real Estate and Rental and Leasing 4,669 1.71% 14 $3,198 54 Professional, Scientific, and Technical Services 11,795 4.31% 9 $4,794 55 Management of Companies and Enterprises 1,540 0.56% 19 $3,055 56 Administrative and Support and Waste Management and Remediation Services 16,169 5.91% 6 $2,361

61 Educational Services 24,531 8.96% 5 $3,347 62 Health Care and Social Assistance 36,300 13.26% 2 $3,289 71 Arts, Entertainment, and Recreation 3,302 1.21% 15 $2,253 72 Accommodation and Food Services 29,214 10.68% 4 $1,472 81 Other Services (Except Public Administration) 8,172 2.99% 13 $2,772 92 Public Administration 12,466 4.56% 8 $2,926 ALL INDUSTRIES 273,762 100.00% $3,362

Source: Alabama Department of Labor, U.S. Census Bureau, and Center for Business and Economic Research, The University of Alabama. Note: Due to disclosure limitations in multiple sectors across several counties, accurate regional new hire monthly wages could not be determined.


Job Creation and Net Job Flows

On average, 14,434 jobs were created per quarter from second quarter 2001 to first quarter 2016 (Figure 7.8); quarterly net job flows averaged 1,343 (Figure 7.9). Seasonal employment due to tourism is reflected in generally stronger second quarter job creation. After dropping sharply in the third quarter of 2015, job creation and net job flows both increased for two consecutive quarters and are expected to be higher in the second quarter of 2016. Quarterly net job flows fluctuate considerably and have ranged from a loss of 4,719 to a gain of 11,033. Job creation refers to the number of new jobs that are created either by new area businesses or through the expansion of existing firms. Net job flows reflect the difference between current and previous employment at all businesses.

Figure 7.8 Job Creation in Southwest AlabamaWorks

Figure 7.7 Southwest AlabamaWorks Employment Distribution

Source: Alabama Department of Labor and U.S. Census Bureau.

Figure 7.9 Southwest AlabamaWorks Net Job Flows

Source: Alabama Department of Labor and U.S. Census Bureau.


High-Demand, Fast-Growing, High-Earning, and Sharp-Declining Occupations

Southwest AlabamaWorks has 736 single occupations based on 2014 to 2024 occupational projections. Table 7.10 shows the top 40 occupations that are expected to be in high-demand, ranked by projected average annual job openings over the projection period. Many of these occupations are related to health care and social assistance, one of the five largest employment sectors identified earlier (Table 7.9). Thus, it is likely that this sector will continue to dominate employment in the region.

The top five high-demand occupations are Registered Nurses; Customer Service Representatives; General and Operations Managers; Cooks, Restaurant; and Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products. Nine of the high-demand occupations are also fast-growing. This means that these nine occupations have a minimum annual growth rate of 2.39 percent, which is much faster than the regional and state occupational growth rates of 0.81 percent and 0.74 percent, respectively.

The top 20 fastest growing occupations ranked by projected growth of employment are listed in Table 7.11. The majority of these occupations are related to the health care and social assistance sector. The top five fast-growing occupations are Engine and Other Machine Assemblers; Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic; Occupational Therapy Assistants; Physical Therapist Assistants; and Physical Therapists.

Table 7.12 shows the 50 selected highest earning occupations in the region. These occupations are mainly in management, health, and engineering fields and pay a minimum average salary of $85,727 and maximum of $303,443 per year. Eight of the top 10 listed are healthcare occupations. Any discussion of earnings must consider that wages vary with experience. Occupations with the highest entry wages may not necessarily have the highest average or experienced wages.

The selected high-earning occupations are generally not fast-growing or in high-demand. Nine of the region’s occupations are both high-earning and in high-demand (Table 7.10). None of the occupations are in all the three top categories.Of the region’s 736 occupations, 86 are expected to decline over the 2014 to 2024 period. Employment in the 20 sharpest-declining occupations will fall by at least six percent, with each losing at least 20 jobs over the period (Table 7.13). No efforts should be made to sustain these occupations because they are declining as a result of structural changes in the economy of the region.


Table 7.10 Selected High-Demand Occupations (Base Year 2014 and Projected Year 2024)t

Average Annual Job Openings

Occupation Total Due to Growth

Due to Separations

Registered Nurses 245 95 150Customer Service Representatives 205 70 130General and Operations Managers 150 40 110Cooks, Restaurant 110 45 65Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products 110 35 80

Landscaping and Groundskeeping Workers 90 35 55Licensed Practical and Licensed Vocational Nurses 85 30 55Accountants and Auditors 80 30 55Welders, Cutters, Solderers, and Brazers 80 25 55Construction Laborers 65 25 40Personal Care Aides* 60 50 10Industrial Machinery Mechanics 60 25 35Medical Assistants 55 30 25Electricians 55 25 30Carpenters 45 20 20Machinists 45 20 25Heating, Air Conditioning, and Refrigeration Mechanics and Installers 40 20 20Insurance Sales Agents 40 10 30Bus and Truck Mechanics and Diesel Engine Specialists 35 20 15Plumbers, Pipefitters, and Steamfitters 35 15 15Computer User Support Specialists 30 20 10Physical Therapist Assistants* 25 15 10Physical Therapists* 25 15 10Industrial Engineers 25 10 15Nurse Anesthetists 20 10 10Mechanical Engineers 20 10 10Computer and Information Systems Managers 15 10 5Healthcare Social Workers 15 10 10Personal Financial Advisors 15 10 10Network and Computer Systems Administrators 15 10 10Medical and Clinical Laboratory Technologists 15 10 10Speech-Language Pathologists* 15 5 5Nurse Practitioners* 15 5 5Financial Managers 15 5 10Medical and Health Services Managers 15 5 10Software Developers, Applications* 10 10 5Computer Systems Analysts* 10 10 5Occupational Therapists* 10 5 5Physician Assistants* 10 5 5Sales Managers 10 5 10

Note: Occupations are growth- and wages weighted and data are rounded to the nearest 5. Occupations in bold are also high-earning.* Qualify as both high-demand and fast-growing occupations.Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama.


Table 7.11 Selected Fast-Growing Occupations (Base Year 2014 and Projected Year 2024)

Employment Percent Change

Annual Growth

Average Annual Job Occupation 2014 2024

Engine and Other Machine Assemblers 90 180 100 7.18 10Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic 120 230 92 6.72 15

Occupational Therapy Assistants NA NA 50 4.14 5Physical Therapist Assistants* 360 530 47 3.94 25Physical Therapists* 350 500 43 3.63 25Home Health Aides 610 860 41 3.49 40Physical Therapist Aides 100 140 40 3.42 10Occupational Therapists* 180 250 39 3.34 10Physician Assistants* 160 220 38 3.24 10Speech-Language Pathologists* 220 300 36 3.15 15Emergency Medical Technicians and Paramedics 450 610 36 3.09 25Phlebotomists 320 430 34 3.00 20Mechanical Engineering Technicians 180 240 33 2.92 10Psychiatric Technicians 220 290 32 2.80 10Personal Care Aides* 1,550 2,030 31 2.73 60Computer Systems Analysts* 240 310 29 2.59 10Clinical, Counseling, and School Psychologists 140 180 29 2.54 10Software Developers, Applications* 280 360 29 2.54 10Nurse Practitioners* 260 330 27 2.41 15Operations Research Analysts NA NA 27 2.39 10

Note: Employment data are rounded to the nearest 10 and job openings are rounded to the nearest 5. Occupations in bold are also high-earning. * Qualify as both high-demand and fast-growing occupations. NA – Not Available.Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama.

Table 7.12 Selected High-Earning Occupations (Base Year 2014 and Projected Year 2024)

Employment Annual Growth (Percent)

Average Annual Job Openings

Mean Annual Salary ($)Occupation 2014 2024

Anesthesiologists 170 210 2.14 10 303,443Surgeons 100 120 1.84 5 300,213Internists, General 30 30 0.00 0 280,527Dentists, General 210 240 1.34 5 231,408Chief Executives 250 260 0.39 5 205,814Family and General Practitioners 130 160 2.10 5 189,095Pediatricians, General 100 110 0.96 5 183,710Physicians and Surgeons, All Other 900 1,040 1.46 40 176,542Nurse Anesthetists* NA NA 2.54 20 164,901Health Specialties Teachers, Postsecondary 290 320 0.99 10 154,287Compensation and Benefits Managers 20 20 0.00 0 146,470


Table 7.12 (continued)

Marketing Managers 30 30 0.00 0 143,222Architectural and Engineering Managers 310 330 0.63 10 141,707Personal Financial Advisors* 340 420 2.14 15 137,397Petroleum Engineers NA NA 0.00 0 133,211Financial Managers* 510 560 0.94 15 121,177General and Operations Managers* 4,290 4,700 0.92 150 118,201Pharmacists 700 710 0.14 15 116,428Chemical Engineers 150 160 0.65 5 115,189Lawyers 1,010 1,060 0.48 20 112,769Sales Managers* 330 370 1.15 10 112,696Education Administrators, Postsecondary 260 280 0.74 10 110,013Broadcast News Analysts NA NA -2.84 0 106,336Natural Sciences Managers 40 40 0.00 0 106,335Ship Engineers NA NA 0.00 0 104,837Industrial Production Managers 570 610 0.68 20 104,304Purchasing Managers 90 100 1.06 5 103,957Training and Development Managers 20 20 0.00 0 102,208Computer and Information Systems Managers* 340 430 2.38 15 102,050Human Resources Managers 160 170 0.61 5 100,578Computer Hardware Engineers NA NA 4.14 0 100,544Medical and Health Services Managers* 380 420 1.01 15 98,996Airline Pilots, Copilots, and Flight Engineers 20 20 0.00 0 98,402Electrical Engineers 390 420 0.74 15 98,236Transportation, Storage, and Distribution Managers 130 130 0.00 5 97,675Environmental Engineers 120 130 0.80 5 97,569Electronics Engineers, Except Computer 90 110 2.03 5 96,042Architects, Except Landscape and Naval 120 120 0.00 0 94,132Mechanical Engineers* 380 480 2.36 20 93,779Administrative Services Managers 100 110 0.96 5 93,594Health and Safety Engineers, Except Mining Safety Engineers and Inspectors 80 80 0.00 0 93,105

Commercial Pilots 110 120 0.87 5 91,980Construction Managers 830 880 0.59 15 91,636Industrial Engineers* 510 620 1.97 25 91,234Computer Network Architects NA NA 0.00 0 88,568Materials Engineers 50 60 1.84 5 87,676Financial Analysts 90 110 2.03 5 86,725Managers, All Other 540 580 0.72 15 86,424Aerospace Engineers 100 100 0.00 5 86,146Computer Occupations, All Other 50 50 0.00 0 85,727

Note: Employment and salaries data are rounded to the nearest 10; job openings to the nearest 5. The salary data provided are based on the May 2016 release of the Occupational Employment Statistics (OES) combined employment and wage file. Estimates for specific occupations may include imputed data. Occupations in bold are also fast-growing. * Qualify as both high-earning and high-demand occupations. NA – Not available. Source: Center for Business and Economic Research, The University of Alabama and Alabama Deptartment of Labor


Skills and Skills Gap Analyses

Jobs require skill sets and it is necessary that jobholders have the relevant skills. Table 7.14 shows skill types and definitions as provided by O*NET Online, which offers skill sets for all occupations ranked by the degree of importance. High-earning occupations typically require skills that are obtained in pursuit of high education that such jobs require. Lower earning occupations require more basic skill sets. Some occupations have no minimum skill set requirements (e.g. dishwashers and maids).

Table 7.15 shows the percentage of selected occupations in the region that list a particular skill as primary. We define primary skills as the 10 most important skills in the required skill set for an occupation. It is important to note that a particular skill may be more important and more extensively used in one occupation than another. Table 7.15 does not address such cross-occupational skill importance comparisons. In general, basic skills are most frequently listed as primary, which means that they are important for practically all jobs High-earning occupations in Southwest AlabamaWorks require more active learning, critical thinking, mathematics, science, writing, complex problem solving, management of personnel and financial resources, judgment and decision making, negotiation, and operations analysis skills than are required for most of the high-demand or fast-growing jobs.

Table 7.13 Selected Sharp-Declining Occupations (Base Year 2012 and Projected Year 2022)

EmploymentNet

ChangePercent ChangeOccupation 2014 2024

Bookkeeping, Accounting, and Auditing Clerks 4,100 3,850 -250 -6Paper Goods Machine Setters, Operators, and Tenders 1,050 870 -180 -17Postal Service Mail Carriers 660 490 -170 -26Tellers 1,300 1,200 -100 -8Switchboard Operators, Including Answering Service 300 200 -100 -33Postal Service Clerks 220 160 -60 -27Postal Service Mail Sorters, Processors, and Processing Machine Operators 160 100 -60 -38Computer Programmers 460 410 -50 -11Textile Cutting Machine Setters, Operators, and Tenders NA NA -50 -26Cutting, Punching, and Press Machine Setters, Operators, and Tenders, Metal and Plastic 550 510 -40 -7Electrical and Electronics Repairers, Commercial and Industrial Equipment 350 310 -40 -11Drilling and Boring Machine Tool Setters, Operators, and Tenders, Metal and Plastic NA NA -30 -14Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 160 130 -30 -19

Layout Workers, Metal and Plastic 330 300 -30 -9Electronic Equipment Installers and Repairers, Motor Vehicles NA NA -30 -60Fallers 150 130 -20 -13Extruding, Forming, Pressing, and Compacting Machine Setters, Operators, and Tenders 240 220 -20 -8Separating, Filtering, Clarifying, Precipitating, and Still Machine Setters, Operators, and Tenders NA NA -20 -13

Sewing Machine Operators 140 120 -20 -14Bookkeeping, Accounting, and Auditing Clerks 4,100 3,850 -250 -6

Note: Employment data are rounded to the nearest 10. NA – Not Available.Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama.


Table 7.14 Skill Types and Definitions

Basic Skills: Developed capacities that facilitate learning or the more rapid acquisition of knowledge.Active Learning — Understanding the implications of new information for both current and future problem-solving and decision-making. Active Listening — Giving full attention to what other people are saying, taking time to understand the points being made, asking questions as appropriate, and not interrupting at inappropriate times. Critical Thinking — Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions, or approaches to problems. Learning Strategies — Selecting and using training/instructional methods and procedures appropriate for the situation when learning or teaching new things. Mathematics — Using mathematics to solve problems. Monitoring — Monitoring / Assessing performance of yourself, other individuals, or organizations to make improvements or take corrective action. Reading Comprehension — Understanding written sentences and paragraphs in work-related documents. Science — Using scientific rules and methods to solve problems. Speaking — Talking to others to convey information effectively. Writing — Communicating effectively in writing as appropriate for the needs of the audience.

Complex Problem Solving Skills: Developed capacities used to solve novel, ill-defined problems in complex, real-world settings.Complex Problem Solving — Identifying complex problems and reviewing related information to develop and evaluate options and implement solutions.

Resource Management Skills: Developed capacities used to allocate resources efficiently.Management of Financial Resources — Determining how money will be spent to get the work done and accounting for these expenditures. Management of Material Resources — Obtaining and seeing to the appropriate use of equipment, facilities, and materials needed to do certain work. Management of Personnel Resources — Motivating, developing, and directing people as they work, identifying the best people for the job. Time Management — Managing one's own time and the time of others. Social Skills: Developed capacities used to work with people to achieve goals.Coordination — Adjusting actions in relation to others' actions. Instructing — Teaching others how to do something. Negotiation — Bringing others together and trying to reconcile differences. Persuasion — Persuading others to change their minds or behavior. Service Orientation — Actively looking for ways to help people. Social Perceptiveness — Being aware of others' reactions and understanding why they react as they do.

Systems Skills: Developed capacities used to understand, monitor, and improve socio-technical systems.Judgment and Decision Making — Considering the relative costs and benefits of potential actions to choose the most appropriate one. Systems Analysis — Determining how a system should work and how changes in conditions, operations, and the environment will affect outcomes. Systems Evaluation — Identifying measures or indicators of system performance and the actions needed to improve or correct performance, relative to the goals of the system.

Technical Skills: Developed capacities used to design, set-up, operate, and correct malfunctions involving application of machines or technological systems.

Equipment Maintenance — Performing routine maintenance on equipment and determining when and what kind of maintenance is needed. Equipment Selection — Determining the kind of tools and equipment needed to do a job. Installation — Installing equipment, machines, wiring, or programs to meet specifications. Operation and Control — Controlling operations of equipment or systems. Operation Monitoring — Watching gauges, dials, or other indicators to make sure a machine is working properly. Operations Analysis — Analyzing needs and product requirements to create a design. Programming — Writing computer programs for various purposes. Quality Control Analysis — Conducting tests and inspections of products, services, or processes to evaluate quality or performance. Repairing — Repairing machines or systems using the needed tools. Technology Design — Generating or adapting equipment and technology to serve user needs. Troubleshooting — Determining causes of operating errors and deciding what to do about it.

Source: O*NET Online (http://online.onetcenter.org/skills/).


Table 7.15 Percentage of Selected Occupations for Which Skill Is Primary

Selected High-Demand

Occupations

Selected Fast-Growing Occupations

Selected High-Earning

OccupationsBasic Skills

Active Learning 43 30 56Active Listening 80 95 86Critical Thinking 78 85 88Learning Strategies 3 10 4Mathematics 3 5 14Monitoring 48 75 58Reading Comprehension 70 90 82Science 8 5 24Speaking 68 85 84Writing 33 45 50

Complex Problem Solving SkillsComplex Problem Solving 38 35 68

Resource Management SkillsManagement of Financial Resources 0 0 2Management of Material Resources 0 0 0Management of Personnel Resources 3 0 20Time Management 20 20 18

Social SkillsCoordination 38 35 34Instructing 10 25 8Negotiation 10 0 12Persuasion 13 10 10Service Orientation 38 55 12Social Perceptiveness 48 65 32

Systems SkillsJudgment and Decision Making 55 60 72Systems Analysis 8 15 8Systems Evaluation 10 15 6

Technical SkillsEquipment Maintenance 8 0 2Equipment Selection 5 0 0Installation 3 0 0Operation and Control 10 5 6Operation Monitoring 15 15 6Operations Analysis 5 10 14Programming 8 10 0Quality Control Analysis 8 15 0Repairing 8 0 2Technology Design 0 0 0Troubleshooting 8 0 2

Note: Rounding errors may be present. Source: O*NET Online and Center for Business and Economic Research, The University of Alabama


Many of these skills require long training periods and postsecondary education. However, high-earning jobs require significantly fewer technical skills. High-demand occupations require somewhat more complex problem solving and technical skills than fast-growing occupations. Fast-growing occupations in general require more basic, social, and systems skills than high-demand and high-earning occupations.

Table 7.16 shows skill gap indexes for all 35 skills in Table 7.14 based on the projection period (2014 to 2024). Skills gap indexes range from 0 up to 100 and are standardized measures of the difference between current supply and projected demand. The index does not provide any information about current or base year skill supply. It focuses on the projection period and identifies critical skill needs. The index essentially ranks expected training needs. The higher the index the more critical the skill is over the specified projection period.

For policy and planning purposes, skill gap indexes have to be considered together with replacement indexes, which illustrate the expected share of job openings due to replacement. Replacement is necessary because of turnover and people leaving the labor force. The smaller the replacement index, the larger the share of job openings due to growth, which in turn implies a need to increase the pace of skill training. Skill gap indexes point to the need to ramp up the scale of skill training while replacement indexes address the pace of training.

By skill type, the skill gap indexes show that basic skills are most critical followed by social, complex problem solving, system, resource management, and technical skills. The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs indicates a strong need for training in these skills. Both the pace and scale of training need to increase for basic and social skills. The pace of training for technical skills needs to increase as well.

Education and Training Issues

Educational attainment in Southwest AlabamaWorks is close to that of the state as a whole. Over 85 percent of residents age 25 and over graduated from high school in 2011 to 2015, compared to 84 percent for Alabama. About 22 percent of the population had a bachelor’s or higher degree versus 24 percent for the state. Skill and education requirements for jobs keep rising. This highlights a strong need to raise educational attainment in the region.

Table 7.17 shows the number of selected occupations in the region for which a particular education/training category is most common. In general, high-earning occupations require high educational attainment levels; only three high-earning occupations do not require a bachelor’s or higher degree. Twenty-two (55.0 percent) of the top 40 high-demand occupations require an associate’s degree at the minimum and 21 (52.5 percent) require a bachelor’s or higher degree. Twelve (60.0 percent) of the top 20 fast-growing occupations require an associate’s degree at the minimum, with nine (45.0 percent) requiring a bachelor’s or higher degree.

The 2014 to 2024 occupational projections indicate that future jobs will require postsecondary education and training at a minimum. Job ads are increasingly requiring a high school diploma or GED at a minimum. Of the region’s 736 occupations and occupational categories, 86 are expected to decline over the period. Employment in the top 20 sharpest-declining occupations will fall by at least six percent over the period, with each occupation losing a minimum of 20 jobs. Education and training for these should slow accordingly.


Table 7.16 Skills Gap Indexes (Base Year 2014 and Projected Year 2024)

Skill Skill TypeTotal Openings

(Projected Demand)Skills Gap

IndexReplacement

Index Active Listening Basic 7,955 79 71Speaking Basic 7,750 77 71Monitoring Basic 6,790 67 69Social Perceptiveness Social 6,415 63 71Coordination Social 6,295 62 69Critical Thinking Basic 6,250 62 69Service Orientation Social 6,250 62 72Reading Comprehension Basic 5,805 57 69Time Management Resource 5,100 50 68Judgment and Decision Making Systems 4,685 46 68Complex Problem Solving Complex 3,645 36 66Writing Basic 3,625 36 67Active Learning Basic 3,585 35 65Persuasion Social 3,315 33 70Instructing Social 3,220 32 64Negotiation Social 2,315 23 73Learning Strategies Basic 2,175 21 65Mathematics Basic 1,755 17 77Systems Analysis Systems 1,675 17 66Management of Personnel Resources Resource 1,665 16 68Operation Monitoring Technical 1,655 16 68Systems Evaluation Systems 1,520 15 65Operation and Control Technical 1,485 15 69Quality Control Analysis Technical 1,255 12 68Troubleshooting Technical 885 9 67Equipment Maintenance Technical 680 7 67Repairing Technical 560 6 63Operations Analysis Technical 425 4 56Equipment Selection Technical 400 4 56Science Basic 390 4 58Management of Material Resources Resource 370 4 70Management of Financial Resources Resource 365 4 71Installation Technical 165 2 67Programming Technical 55 1 64Technology Design Technical 55 1 45

Note: These are annualized skills indexes for 2014 to 2024.Source: Center for Business and Economic Research, The University of Alabama; Alabama Department of Labor; and O*Net Online.


Table 7.17 Number of Selected Occupations by Education/Training Requirement

Most Common Education/Training Requirements Categories

Selected High-Demand Occupations

Selected Fast-Growing Occupations

Selected High-Earning Occupations

Doctoral Degree or First Professional Degree 1 2 10Master's Degree 6 4 2Bachelor's Degree Plus Work Experience 6 0 21Bachelor's Degree 8 3 14Associate Degree Plus On-the-job Training or Work Experience 0 3 0Associate Degree 1 0 0Postsecondary Non-Degree Plus On-the-job Training or Work Experience 1 1 1Postsecondary Non-Degree 2 2 0Some College, no Degree Plus On-the-job Training or Work Experience 1 0 0Some College, no Degree 0 0 0High School Diploma Plus On-the-job Training or Work Experience 10 3 2High School Diploma 0 0 0No Formal Education Credential Plus On-the-job Training or Work Experience 4 2 0No Formal Educational Credential 0 0 0

Note: The on-the-job training refers to the typical on-the-job training needed to attain competency in the occupation in addition to the typical education needed for entry to the occupation. This could be long-term, moderate-term, or short-term on-the-job training. These types of training are more common in occupations that require postsecondary non-degree or less educational attainment. Other types of on-the-job training requirements that may be needed but are not shown on the table are apprenticeship and internship/residency that are typical in certain professions many of which require higher educational attainment. Source: O*NET Online; Center for Business and Economic Research, The University of Alabama; and Alabama Department of Labor.


Economic growth in Southwest AlabamaWorks is expected to be greater than labor force growth leading to worker shortfalls. From a 2014 base, worker shortfalls of 34,785 and 44,696 for 2024 and 2030 respectively are expected (Table 7.18). By 2040, the worker shortfall is expected to grow to 46,281. A focus on worker skills and shortfalls must be the region’s priorities through 2040. Worker shortfalls for critical occupations will need to be continuously addressed.

Since employment is critical to economic development, strategies to address potential shortfalls must be adopted and implemented. Such strategies should aim at increasing labor force participation, encouraging in-migration, and raising worker productivity. Efforts to address the need for higher labor force participation, higher productivity, and faster labor force growth to meet workforce demand must include: (1) improving education and its funding; (2) introducing economic opportunities that attract new and younger residents; (3) lowering the high school dropout rate; (4) focusing on hard-to-serve populations (e.g. out-of-school youth); (5) continuing and enhancing programs to assess, retrain, and place dislocated workers; (6) encouraging older worker participation in the labor force; and (7) facilitating in-commuting.

Improving education is vital because a highly educated and productive workforce is a critical economic development asset. The educational and training requirements of high-demand, fast-growing, and high-earning occupations show the significance of education in developing the future workforce. The importance of basic skills generally and for high-demand, high-growth, and high-earning jobs in particular demonstrates a strong need for training in these skills. The pace and scale of training needs to increase for basic and social skills. Ideally, all high school graduates should possess basic skills so that postsecondary and higher education can focus on other and more complex skills while enhancing these basic skills. Employers should be an integral part of planning for training as they can help identify future skill needs and any existing gaps. Education and training for the 20 sharp-declining occupations in Table 7.13 should slow accordingly.

Another very important reason to improve education is that more educated people are more likely to work; data on worker participation and educational attainment show that labor force participation increases with worker education. Productivity also rises with education, which yields high private and social returns. Workforce development must view all types of education and other programs (e.g. adult education, career technical training, worker retraining, career readiness, etc.) as one system. Funding to support workforce development may require tax reform at state and local levels and must provide for flexibility as workforce needs change over time and demand different priorities.

Programs to assess, retrain, and place dislocated workers—especially those affected by outsourcing and structural changes in the economy—should be continued and enhanced because they can improve the labor force participation rate. Hard-to-serve populations include persons in poverty, those receiving welfare, residents of sparsely populated areas, and those on active parole. These populations are often outside of the mainstream economy and are in poverty. They usually have difficulty finding work because they have low levels of educational attainment, lack occupational skills, or face geographic or other barriers. They are a potential human resource, but investment in training, transportation, child care, infrastructure, etc. may be needed to tap this resource.

Implications and Recommendations

Table 7.18 Expected Worker Shortfall

2014-2024 2014-2030 2014-2035 2014-2040Total population growth (percent) 4.4 7.5 11.7 12.9Age 20-64 population growth (percent) -2.0 -2.2 0.0 2.6Job growth (percent) 10.0 13.1 15.7 18.4Worker shortfall (percent) 11.9 15.3 15.8 15.9Worker shortfall (number) 34,785 44,696 46,014 46,281

Source: Center for Business and Economic Research, The University of Alabama.


In-migration is one way of growing the labor force as it helps population growth. The region’s population growth rate is low and the working age group is expected to decline in the future. This might hinder the region’s ability to meet the expected job demand barring future economic slowdowns. Higher employment demand could be partially served by in-commuting. However, new residents can be attracted using higher-paying job opportunities from the region’s economic development successes. Investment in amenities and infrastructure may be needed to support such growth. In-migration is generally more beneficial to a region than in-commuting since it grows the economy faster and adds to the tax base.

Policies that facilitate and encourage older worker participation are needed as older workers can help meet the region’s workforce challenge. Such policies can be related to income taxation, job flexibility, and retirement programs. As the share of older people in the population is projected to increase (see Table 7.5), it becomes even more important that they be active in the workforce. Older worker participation has been rising nationally since the early 1990s. This has been attributed to reasons including:

• Older workers can work longer because they are healthier• The number of physically demanding jobs is falling• Defined contribution plans are replacing pensions• There are fewer employer-paid retiree health insurance programs• Social security reforms affecting those born after 1938 (i) gradually raise the normal retirement age from 65 to

67, (ii) increase the rate at which monthly payments rise with delayed benefits, and (iii) eliminate the reduction in benefits for those working beyond the full retirement age.

Diversifying the region’s economy will strengthen it. This demands that economic development also focus on retaining, expanding, and attracting businesses that provide more high-earning jobs. Current workers—including the underemployed—would welcome higher-earning opportunities. An economic development focus on diversification would require that workforce development pay attention to postsecondary and higher educational systems to ensure a ready and available workforce for new and expanding businesses. The higher incomes earned by graduates of these institutions would help raise personal income for the region and provide additional local (county and city) tax revenue. Raising personal income by improving educational attainment and technological skills for a region that has low population and labor force growth rates is an effective economic development strategy. Together, workforce development and economic development can build a strong, well-diversified economy. Indeed, one cannot achieve success in one without the other.

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