Narrative: II. a. 1. B.

DEMOGRAPHICS

The demographic makeup of Arkansas’s citizenry is changing in fundamental ways, as outlined in the “Arkansas Demographic Research Brief” published by the Institute for Economic Advancement at the Center for Economic Development at the University of Arkansas at Little Rock.

(http://www.aiea.ualr.edu/images/rokdownloads/DemoRes/Research%20Publications%20and%20Briers/DemChar.pdf)

An aging workforce is the most dramatic change and the one which has the greatest implications for workforce in the state.

The ratio of aged persons to youth is expected to rise from 49.2 percent in 2000 to 60.7 percent in 2020. This increase in the number and proportion of aged persons has big implications for health and social services, education, available workforce, and other areas.

Another major demographic change will be greater diversity in the state, with the non-white population expected to rise to 30 percent by 2020, from a low of 18.4 percent in 1970. This increase in proportion is in large part attributable to an influx of Hispanics in the state, with the Hispanic population growing by 337 percent between 1990 and 2000.

RACIAL COMPOSITION OF ARKANSAS POPULATION, YEAR 1810 - 2020

The other area of major change in the demographics of Arkansas is increasing urbanization. In 2000, 56.7 percent of Arkansans lived in urban areas, with the resulting 43.3 percent living in rural areas. However, the percentage of Arkansans living in urban areas is expected to rise to 61 percent by 2020, with the remaining 39 percent living in rural areas in 2020.

The population of Arkansas grew to 2,988,248 in 2016, adding 10,395 between 2015 and 2016 and 72,330 between 2010 and 2016. Arkansas’s civilian labor force increased 10,112 between 2015 and 2016, and employment increased 23,820 over the same period. Compared to 2006, the size of the civilian labor force was down 22,719 while employment was down 5,912. Unemployment decreased 13,708 between 2015 and 2016, with the unemployment rate dropping by 1.1 percent. Compared to ten years ago, unemployment has decreased 16,807 with the unemployment rate decreasing by one and two-tenths percent to 4.0 percent in 2016 (see the chart below). The State’s unemployment rate continued to drop throughout 2017, with the November 2017 not seasonally adjusted rate declining to 3.3 percent (seasonally adjusted rate was 3.7 percent).

>>ARKANSAS CIVILIAN LABOR FORCE ESTIMATES ( ANNUAL AVERAGES)

The chart below shows the number of employed Arkansans from January 2007 to December 2017. Notice the decline at the start of the recession in 2008 and the steady increase that began towards the end of 2013. The number of employed has now rebounded to pre-recession levels.

STATE OF ARKANSAS

NUMBER OF EMPLOYED (SEASONALLY ADJUSTED)

JANUARY 2007 - DECEMBER 2017

The chart below shows Labor Force data calculated by the U.S. Census Bureau (based on the 2012-2016 American Community Survey). Labor Force data is included for various demographics, including age, race, sex, poverty status, disability status, and educational attainment.

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The State of Arkansas had 1,191,791 average covered employees in 2016. Of those, 83.4 percent worked in the private sector, 1.7 percent worked in Federal Government, 5.8 percent worked in State Government, and 9.1 percent worked in Local Government.

NONFARM PAYROLL JOB TRENDS

Between 2015 and 2016, the average number of nonfarm payroll jobs rose 18,200. Seven major industry sectors posted over-the-year growth, three sectors declined, and one had no change. Professional and business services added 3,800 jobs that were evenly distributed between professional/technical (+1,300), management (+1,500) and administrative (+1,100) roles. Jobs in trade, transportation, and utilities rose 1,300. Most of the hiring occurred in retail trade. Leisure and hospitality added 3,700 jobs between 2015 and 2016, largely in food services (+3,400). The largest annual decline occurred in mining and logging, down 1,700. Other losses occurred in manufacturing (-400) and government (-300).

Compared to 2006, average nonfarm payroll employment in 2016 increased 28,900. All the growth was in service providing industries (+81,700), which was partially offset by the losses in goods producing industries (-52,900). Six major industry sectors expanded between 2006 and 2016, while five sectors declined. Educational and health services reported the largest increase, adding 30,600 jobs. Most of the hiring was in health care and social assistance (+29,500). Jobs in professional and business services rose 28,100, with growth seen across all three sub-sectors. Leisure and hospitality added 18,000 jobs over the decade, mostly in food services (+16,400). Government expanded by 4,800 jobs, largely attributed to gains in state government (+8,400). The largest decline between 2006 and 2016 occurred in manufacturing, which lost 45,000 jobs. Most of the loss was in durable goods manufacturing (-31,800). Smaller declines were reported in construction (-6,600) and information (-5,100).

>>ARKANSAS NONFARM PAYROLL JOBS (ANNUAL AVERAGE)

The job market in Arkansas is predicted to improve between 2016 and 2018 with 41,750 new jobs, an increase of 3.06 percent. Goods-producing industries are estimated to see a net gain of 4,466 jobs, while the service-providing industries are forecasted to increase 33,437. Arkansas' self-employed ranks are estimated to experience a net gain of 3,634, an increase of 2.86 percent. Education and health services is projected to be the top growing major industry sector, adding 9,637 jobs to total 302,879.

EMPLOYMENT PROJECTIONS BY SKILL AND EDUCATION

Despite the vibrant business environment in Arkansas, it is difficult to ignore the disparity of prosperity and opportunity between regions in the state as well as groups of workers within those regions. This disparity among workers persists in even the most prosperous areas of the state and is seemingly institutionalized in the poorer regions. There are three key indicators of Arkansas’s workforce competiveness among other states in the union; it is 49^th in the number of citizens with a bachelor’s degree, 46^th in terms of poverty, and number one in terms of obesity rates (2016 data). The challenges facing Arkansas in developing a dynamic and educated workforce to compete in a global marketplace are daunting. The barriers to prosperity are especially concentrated in historically poor regions of the state, as well as areas of poverty even within the state’s more prosperous areas.

One of the greatest challenges facing Arkansas’s workforce is the fact that it has one of the lowest levels of education in the nation. For example, the US Census Bureau has Arkansas ranked at 48th in the number of adults with a bachelor degree or more. While nationwide 30.3 percent of Americans age 25 and older have a bachelor’s degree or more, only 21.5 percent of Arkansans have a bachelor’s or more. Only West Virginia at 19.6 percent and Mississippi at 21 percent are ranked higher.

What is even more striking is the disparity in education among different groups in the state. The ACT profile for the high school graduating class of 2017 has 27 percent of students in the nation scoring at or above ACT’s benchmark for college readiness, but only 16 percent of Arkansas 2017 graduates met that standard. However, only 3 percent of African Americans in the state met all four benchmarks, and only 9 percent of Latinos met those standards. (https://www.act.org/content/dam/act/unsecured/documents/cccr2017/P_04_049999_S_S_N00_ACT-GCPR_Arkansas.pdf.)

Arkansas finds itself lagging in educational attainment compared to most other states in the nation, and increasingly, the U.S. finds itself lagging behind an increasing number of nations. It is clear the twin forces of automation and globalization continue to create more opportunities for those with postsecondary education while the number of occupations available for those with a high school diploma or less continues to decrease. This is a global phenomenon, which this chart from the Organization for Economic Cooperation and Development (OECD) Skills Outlook 2013 demonstrates (http://www.oecd-ilibrary.org/education/oecd-skills-outlook-2013_9789264204256-en)

OECD Skills Outlook 2013

Occupational Groupings by Average Education Level

Percentage Change in Share Relative to 1998

As a southern state, some areas of Arkansas may be in what Tony Carnevale, research professor and director for the Georgetown University Center on Education and the Workforce, describes as in a “low-wage/low-skill equilibrium,” where the supply of skills and demand for skills are balanced at low-education and low wage levels (https://cew.georgetown.edu/wp-content/uploads/2014/11/DecadeBehind.FullReport.073112.pdf). In such areas, low educational achievement is both a cause and consequence of the industries and occupations in those areas. Areas where the majority of occupations require little education provide fewer incentives for those seeking to improve their employment through education.

Areas with low levels of educational attainment in the state continue to have a higher concentration of jobs in manufacturing, utilities, and transportation. However, long-term job growth in these industries is easily compromised by the productivity growth that increases output with fewer workers. Manufacturing jobs are also susceptible to both global and regional competition, which have been demonstrated by the high number of trade certified company layoffs and closures in Arkansas. However, other companies in Arkansas have recently announced expansions which will create thousands of jobs.

While the majority of jobs in the Arkansas economy are low-skilled jobs (those that require a high school diploma or less), it is the high-skill jobs that are projected to be the fastest growing skill group with a growth rate of 11.95 percent. Middle-skill jobs are defined as occupations that require more than a high school diploma, but less than a bachelor’s degree. These jobs are estimated to increase by 15,890 and have 4,728 openings annually between 2014 and 2024. As seen on the charts below, the ratio of middle- and high-skill job employment to total state employment is projected to go up from 2014 to 2022. The rate for low-skilled jobs is expected to fall slightly, as a percent of total employment.

ARKANSAS 2014-2024 PROJECTIONS BY SKILL LEVEL

>>>>ARKANSAS JOBS BY SKILL LEVEL, 2014

ARKANSAS JOBS BY SKILL LEVEL, 20124

Every education category is projected to see positive net growth between 2016 and 2018. Occupations requiring less than a high school education are expected to add the most jobs during the projection period, adding 13,670 jobs. Jobs requiring a high school diploma or equivalent are estimated to increase 13,643. At 3.97 percent, jobs requiring a master’s degree are projected to be the fastest growing educational group. Occupations requiring a bachelor’s degree are expected to grow by 8,417 jobs or 3.45 percent. Growth in occupations requiring a doctoral or professional degree is estimated to be 3.54 percent.

Projected Employment by Educational Attainment (2016-2018)

In the chart below (based on employment in 2014), the workers (blue bar) are an estimate of the number of people in the labor force who have obtained the level of education needed for the occupation. The jobs are an estimate of the number actually employed in the occupation. For both middle-skilled and high-skilled occupations, the number of workers trained for those occupations is higher than those employed in the occupation. The gap for middle-skilled occupations is high, with 482,148 trained for the occupation and 150,250 actually in the occupation. For high-skilled jobs, the gap is much lower. The gap for low-skilled jobs is reversed, where the people actually working in these jobs is much higher than those who have trained for these jobs. This can be interpreted to mean that a large number of workers trained in middle and high-skilled occupations are employed in lower-skilled occupations. The charts below indicate roughly more than 392,000 workers are underemployed, with the majority affecting middle-skilled occupations.

Skills Gap (Estimated 2014 Employment)

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The chart below includes five high-demand occupations that require middle-skill training.

High Demand Middle-Skill Occupations (by Industry and Wage)

SKILL GAPS

Recent surveys of employers attending statewide regional advisory council meetings of the Career and Technical Education program indicated that the skills needed by employers fall into four groups - 1) soft skills, 2) basic/core skills, 3) technical skills and 4) education programming and promotion. Of the responding employers, 91 percent indicated that soft skills and basic core skills were needed and only nine percent indicated that technical skills were an issue. Many employers indicated that if they could find workers that had the soft, basic core skills, they could train them for the technical skills needed.

• Soft Skills refers to areas including attendance, ownership, initiative, attitude, work ethic, perspective, teamwork, customer service, dress code, and professionalism

• Basis /Core Skills refers to interviewing, resumes, computer skills (MS Office software), math, problem solving, communication, writing, reading, troubleshooting, critical thinking, and attention to detail

• Technical Skills refers to a particular job skill such as electronics, maintenance, tool & die, certified nursing assistant, welding, technical certifications, robotics, equipment and computer programming, computer aided design, math, biology, chemistry, and drawings and schematics.

• Education Programming and Promotion refers to demonstrations by employers at schools, internships, job shadowing, apprenticeships, tours, mentoring, job/career fairs, concurrent credit, equipment donations, and work-based learning for students, teachers, counselors, career coaches, parents, and administrators.

  In addition to the data collected at the regional advisory councils, the Arkansas State Chamber conducted a survey of business leaders in order to better understand the employment needs of Arkansas manufacturing and trade businesses. The online survey included 168 respondents representing manufacturing, construction, transportation, utilities, agriculture, forestry, mining, wholesale trade, and other related industries. The results of the survey were analyzed and four key items were identified by the Chamber:

• Lack of Qualified Workers - 82 percent of companies regularly have jobs or positions that they are not able to fill with qualified workers based on specific skill sets.

• Reasonable Education Requirements - 84 percent of companies are looking for an educational attainment of two-year degree or less.

• High Wage Jobs Available - 44 percent of average, entry level salaries for open positions are between $31,000 and $50,000.

• Lack of Partnerships - Employers are aware of training programs, but too many are not partnering with them for recruiting purposes.

  The survey also collected data from the respondents related to key skills required, key recruiting efforts, and key problem areas.

• Key skills required

• CAD

• Computer Programming

• Blueprint Reading

• Electrical

• Engineering

• Fork Lift Operation

• Machining

• Welding

• CNC Programming

• Tool & Die

• Trucking

• Key recruiting efforts

• Workforce Centers

• Word of Mouth/Employee Referrals - best employees come through this way

• Temp Agencies

• Newspaper Ads

• Training Certification Schools

• Online Advertising (Monster, Craig’s List, Career Builder)

• Key problem areas

• Attendance

• Problem Solving/Analytical Thinking

• Interpersonal Skills/Teamwork

• Following Directions/Reading & Using Information

• Basic Computer Skills

• Drugs