Volume 9,
No. 2
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Articles:
An
Examination of the Illinois and United States Economy Using Current Employment
Statistics Data
Demographic Issues Facing the “New” Workforce
New Standards and Geographic Definitions for Metropolitan Statistical Areas
Important Changes to Illinois Statewide and Sub-State Labor Force Estimates
Demographic Issues Facing the “New” Workforce
The 2000 Census provides a picture of the challenges Illinois employers will face in the coming years. According to data from the U.S. Census Bureau, the Illinois labor force is getting older and more diversified. While diversity in itself allows the employer to utilize the talents of a variety of people, the workforce may not be prepared to meet the requirements of a technology-laden workplace. Examination of decennial census data also reveals how age, educational attainment, and the importation of labor will affect employers’ ability to staff their companies.
An Aging Population
An examination of the information on age groups, their growth and decline,
provides a clearer picture of Illinois’ working population. The population
in Illinois has aged between the 1990 and 2000 Censuses. The median age
was 32.8 years in 1990 and 34.7 in 2000. According to Census data for
Illinois, the ages with the largest population growth between 1990 and
2000 are those between 35-59 years. However, the number of 20-34 year
old workers who are expected to replace workers between the ages of 35-59
year old workers experienced significant declines during that same period.
Many economists have observed that baby boomers comprise a large portion
of the skilled and leadership positions in the workforce. Now and in the
future, there may be a shortage of workers in some occupations as the
population has fewer workers who have the necessary experience.
Business Response
In many work places, employers are devising strategies to deal with the
potential worker shortages. One option, according to Jane
Little and Robert Triest, is to invest in capital improvements that will
increase production and reduce the need for labor.1 As businesses invest
in new equipment such as machinery and computers the employees can use
these resources to be more efficient. Recent gains in productivity have
reduced the need for workers and slowed the addition of jobs as the nation
recovers from its recession. While investment in productivity improves
business output, it does not completely eliminate the need for labor.
A second option for employers is to retain and re-train their workers. This option to invest in the updating of current employees’ skills allows them to keep the experienced workers they need as their older experienced workers retire. However, investment in worker training is not without risk since the newly trained workers may take their recently acquired skills to a different employer.
Diversity and the Workforce
Employers may face additional difficulties as the workforce becomes more
ethnically diverse. As the population of foreign families in Illinois
increases, issues involving language and educational attainment have become
heightened. Census data indicate that in Illinois over one million people
speak English less than the “very well” category. That equals
9 percent of the population older than 5 years. In urban areas where new
immigrants tend to locate, workers and employers must adjust to these
changes. As an example, in the Rockford area, there has been a noticeable
increase in advertisements for bilingual workers as businesses work to
address customer demands and worker-management relations.
The increase of foreign-born workers has also added to educational attainment issues. According to Little & Triest, recent immigrants have relatively little schooling compared to U.S. natives.2 Sixty-eight percent of the Mexican immigrants to the U.S. aged 24 to 64 years have not completed high school. Little & Triest explained that immigrants from Mexico have family and social connections within the U.S. and that travel costs are relatively low.3 In 2000, 12.3 percent of the Illinois population were foreign born compared to 8.3 percent in 1990, according to the U.S. Census Bureau. The number of individuals in Illinois born in Latin American countries accounted for 47.8 percent of the foreign born population, almost twice as much as Europe (25.5 percent) and Asia (23.5 percent). If you follow the U.S. information reported by Little & Triest, the Illinois population is experiencing an increase of lower educated individuals in a market that at the same time is experiencing a greater demand for educated workers.
Lifelong Learning is Key
Gains in productivity, along with the shifting of less skilled jobs overseas,
necessitates the need for a workforce with increased skills and the willingness
to participate in lifelong learning. According to business futurist Roger
Herman in Industry Week, the U.S. will face a shortage of skilled computer
and technology workers in the manufacturing sector.4 In the past, a high
school diploma would allow entrance into a lifelong career in manufacturing.
However, Herman said, “the manufacturing jobs that are going to be
available are going to be more sophisticated than traditional manufacturing
sector jobs.”5 The education and experience of workers is increasingly
important as businesses invest in technology and shift some repetitive
jobs overseas.
The Census measures the educational attainment level of the population, which can help assess the preparedness of the workforce. On the positive side, the 2000 Census data shows significant percent gains in the number of people with a college education from 1990 to 2000 (see graph on previous page). The number of people with graduate and professional degrees in Illinois grew by 40 percent and there was a 33 percent gain in individuals with bachelors’ degrees. Increases in technology in the workplace will require individuals to have higher levels of education. A decline in the number of lower skilled jobs will make it more difficult for individuals with less education to gain and retain employment.
A further look at the data shows that while Illinois has experienced increases in educational attainment at the college level, a large portion of the population still has a high school degree or less. For example, according to the 2000 census, 27 percent of the population had no more than a high school degree or GED. While this number is below the 30 percent level posted in the 1990 census, it still represents a significant portion of the population. If broken down further, eleven percent had only a 9th grade to 12th grade education, and seven percent had only a 9th grade education. An overall look at the population shows that 26 percent of Illinoisans have a bachelor’s degree or higher, with 81 percent of the population having a high school degree or higher. This is an increase in educational attainment, but there still is a large segment of the workforce that may lack the skills needed to ensure sustainable employment.
Analysis of Census data verifies that Illinois employers will face a changing workforce in the future. As experienced workers retire, the search for replacements, especially skilled and experienced workers, may be difficult. Illinois has experienced an augmentation of its workforce through immigration. New immigrants allow employers to diversify their workplace, but some workers may not have the education that the 21st century workplace requires. Solutions such as retraining current workers and increasing productivity will continue to provide some relief to employers. However, changes in the workforce will bring about many challenges for Illinois employers and its economy.
Notes:
1 Little, Jane and Robert Triest. “The Impact of Demographic Change
on U.S. Labor Markets.” New England Economic Review First Quarter
2002: p. 47.
2 Little, p. 58.
3 Little, p. 60.
4 McClenhan, John. “The Next Crisis: Too Few Workers.” Industry
Week May 2003: p. 40.
5 McClenhan, p. 41.
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