(continued)
A Sector-by-Sector Hike
Through the Texas Economy
AgricultureA Look at Occupations over the Next Ten Years:
After falling during most of the latter half of the 20th century, farm and ranch employment overcame several years of bad weather to grow during the 1990s.The number of Texas farm workers fell from 241,000 in 1980 to 227,000 in 1990, according to the Current Population Survey and Texas' TASS/SOICC Quarterly Farm Labor Survey. By July 1998, this number was up to 268,000. Most of this employment growth was among self-employed farmers and unpaid family helpers. Farm employment is not as accurately measured as nonfarm employment.
Near-term economic forecasts for agriculture are notoriously difficult because their accuracy so heavily depends on unpredictable weather factors. Longer range estimates are grounded in less capricious economic factors. The real gross state product from Texas agriculture has grown an average of 4.5 percent per year in the 1990s, nearly matching the state's overall 4.6 percent average annual growth rate, despite several droughts and bouts of price instability. Over the next ten years, agricultural gross product likely will grow faster than the overall state economy (3.8 versus 3.5 percent annually).
Mining
The oil and gas industry, effectively the mining sector in Texas, has more struggles ahead, resulting in more job losses. During the 1980s, mining lost about 2.8 percent of its employment annually. The decline was hardly smooth. It was characterized by huge gains in the early 1980s and near-devastating losses in the middle and latter years of the decade. The 1990s have been somewhat more stable, but job losses still averaged 1.5 percent per year. The forecast suggests the same pattern for the next 10 years.Cycles are likely to occur, but the timing is difficult to forecast. Oil and gas production in Texas is declining, while oil and gas prices are sensitive to potential overproduction abroad. As a consequence, mining will lose another 1,300 jobs annually (0.9 percent) over the next ten years.
Construction
Texas housing construction reached its highest level in over a dozen years in 1998, with a total of 170,000 units built statewide. The figure for 1999 should come close to that number again. Between 2000 and 2010, net migration and generally healthy economic conditions should keep annual housing starts between 150,000 and 190,000 units and nonresidential building construction between 150 and 200 million square feet. To meet the demand, construction employment gains will continue, but at a rate much slower than during the 1990s. Annual increases of 1.8 percent job growth are expected.Manufacturing
The manufacturing of construction materials will likewise slow in the early years of the new century. With Texas continuing to see net migration of about 180,000 annually, the manufacturing of construction materials will remain a potent source of jobs for the state. Growth rates will be much slower than in recent years, as rapid increases in residential and nonresidential building will give way to more stable construction levels. Lumber and wood manufacturing will grow at 2 to 2.5 percent annually over the decade, while job growth in stone, clay and glass manufacturing will likely fall below one percent annually.Given the state's enormous petrochemical production capacity, it is not too surprising that the Comptroller's Fall 1999 forecast estimates that miscellaneous nondurables, which is mostly plastics manufacturing, will have the highest employment growth among Texas' manufacturing sectors. With plastics manufacturing, Texas is set to capitalize on its abundant raw materials for plastics.
At first, it may be surprising that paper manufacturing is projected as one of the more rapidly growing manufacturing industries. It was once argued that computers would drastically reduce the use of paper, because of electronic mail and file sharing. In reality, computers have intensified paper usage for some activities. For example, mass mailings are now cheaper due to computers. Also, two of the highest volume Internet companies sell a slightly old-fashioned product--books. Further, paper products are a major input for the construction and manufacturing sectors. Over the next ten years, employment in paper and paper packaging materials will rise by 2.8 percent annually.
Computers and electronics employment in Texas will grow at a slower pace in the new decade. The industry is more mature and slightly more saturated, with severe competition lowering prices and squeezing industry profits. As relative speed and quality improvements of computing equipment become less noticeable, consumers already owning computers will be less inclined to trade up. Online growth rates are likely to keep roaring along, but computer manufacturing job growth is expected to tail off from 2-3 percent annually in the 1990s to 1-2 percent annually from 2000 to 2010.
International exports underlie an increasing share of Texas manufacturing activity, and exports more than doubled during the 1990s. Total exports, under $40 billion annually as the 1990s began, reached $87.4 billion in 1999, of which more than two-fifths went to Mexico. Over the next decade, Texas exports will more than double again, reaching $200 billion in 2008 and $233 billion by 2010. The Internet has allowed even the smallest businesses to expand their customer base, their hours and their geographic market, whereby a small local company with an Internet presence can quite easily become an exporter.
Transportation, Communications, and Public Utilities
Communications--primarily cellular and standard telephones and modem connection services--will have the third fastest growth rate of any sector. It is expected to trail only business services and engineering/consulting/research services. Growing at 3.9 percent, nearly 6,500 communications jobs will be added annually through 2010. Transportation services will be close behind at 3.4 percent annual growth, as trucking and airlines take advantage of global trade, and add 14,400 jobs each year. Utilities, which will be undergoing deregulation and widely ranging competition, can expect only about 0.3 percent annual growth.Trade
Retail trade employment growth rates will continue to mirror the overall growth rate of the state economy, gaining jobs at a slightly muted 2 percent annually through 2010. Wholesale trade will return to its traditionally slower growth rate of 1.3 percent. Since exports are expected to more than double over the next ten years, proficiency in more than one language will be a great plus in job hunting.Finance, Insurance and Real Estate
The finance, insurance and real estate industry is expected to add far fewer jobs in the next decade than it did in the last. Investment finance and real estate pushed up job growth in the 1990s, when interest rates had room to fall and decreases of about 2 percentage points spurred housing starts and stock investments. But over the next ten years, new technology, consolidations, and marked increases in employee productivity will adversely affect employment in banks and savings institutions. While federal restrictions on banking activities have eased, the likely result will be increased mergers, and therefore little or no net employment growth is expected in banking. Insurance employment, mirroring general population growth, will increase by about 1 percent per year through 2010, while real estate employment, likely to be pressured by interest rates and technological improvements, will remain flat.Services
Texas employment in services has mushroomed by 60 percent in the 1990s, increasing by about one million jobs statewide. The services subcategory is expected to add 47 percent of the state's total nonfarm job growth over the next ten years, or about 108,000 jobs annually. Business services will be the fastest growing individual subsector in Texas in the first decade of the 21st century, at a 4.9 percent annual rate of growth. Engineering/management/consulting/research services will follow closely with a 4.5 percent annual growth. At 2.5 percent growth, health services will continue to add jobs faster than the overall economy, mostly because of an aging population.Government
Government continues to move closer to home, as evidenced by virtually no job gains in the federal sector and increasing local employment. While federal government employment in Texas will barely budge over the next ten years, state government jobs will grow at about 1.3 percent a year. Local government, including schools, will grow as fast as the overall economy, at 2.2 percent annual job growth.
Most New Jobs in Slow-Growth Occupations
Although high technology has become a popular explanation for much of Texas' rapid economic growth, the bulk of the new jobs in the state in the next 10 years will be created by more traditional forces.Occupational Growth Drivers: Old-Fashioned Factors Still PredominateTexas will create more than 190,000 new jobs per year over the 1996-2006 period (see Table 4), according to the most recent occupational projections from the Texas Workforce Commission (TWC). Although this is somewhat lower than the Comptroller's Fall 1999 forecast of 231,000 net new jobs annually from 2000 to 2010, the occupational distribution of the Workforce Commission's older projections still appears reasonable.2
Most New Jobs in Slow-Growth Occupations
As implied in the Comptroller's employment-by-industry projections, most of the new jobs created in Texas, according to TWC's projections, will be in large, slow-growing occupations. In total, only about 40 percent of the state's new jobs will be in occupations growing substantially faster than the average statewide job increase rate of 21 percent over the 10 years (see Table 5).
High technology, as expected, will create a large share of these fast-growth positions, in occupations such as systems analysts and computer/electrical engineers. The rapidly growing health care industry will also produce a large number of fast-growth occupations such as nurses, home/health care aides, and nursing aides/orderlies. Finally, childcare centers, restaurants, and food preparation services will produce another set of fast growing occupations in a wide-range of generally low-paying retail and service occupations.
In contrast to the fast-growth positions outlined above, occupations growing at 75 percent or less than the statewide average will produce only about 10 percent of the new jobs over the next decade. The TWC indicates that a wide range of unrelated occupations--including general office clerks; janitors and cleaners; lawyers, doctors, and college/university faculty; teacher's aides; and farmers--fall into this category.
Finally, the other half of the new jobs in Texas will be in occupations growing at 75 to 125 percent of the statewide average. Here, of course, will lie some of the state's biggest job producing occupations, including cashiers and retail salespersons; general managers, executives and other administrators/supervisors; helpers and laborers; truck drivers; waiters and waitresses; and elementary and secondary teachers.
General population growth, reflecting the state's relatively high birth rate and continued positive net migration of new residents, will drive almost 55 percent of state's total new jobs over the next 10 years. Occupations that will benefit the most from the state's expanding population include various levels of managers, executives, and administrators; office clerks, receptionists and information clerks; helpers and laborers; marketing, sales and clerical supervisors; truck drivers, guards, and maintenance repairers; non-computer related engineers; and sales and customer service representatives (see Table 6).High Skilled, High Paying & Other Jobs
In addition to overall population gains, the relatively high growth of both the younger and older populations, will account for another 20 percent of Texas' new jobs. During this period, the relatively high gains in the younger age population will drive expanding demands for elementary/secondary teachers and teacher's aides; college and university faculty; and child care workers. On the other hand, the aging of the population will be the primary factor increasing the demands for a cluster of health-care related occupations, including registered and practical nurses; personal home and health care aides; and nursing aides/orderlies.
Thus, overall, almost three-quarters of the new jobs created in Texas will be driven by the continued growth of the state's overall population and dependent population groups. This is nothing new.
Following general and dependent population growth, another traditional factor--the combination of population growth and the increase in average household incomes--will account for another 20 percent of the state's new jobs created over the next 10 years. The particular occupations benefiting from this force are retail sales and a plethora of food service occupations serving the growing likelihood to dine away from home. In the retail sales category, occupations that will create a relatively large number of new jobs in the state include cashiers and retail salespersons. Food service occupations that will benefit from the increasing demand to eat away from home include food preparation and service workers; waiters and waitresses; restaurant and short-order cooks; and food service/lodging managers.
Finally, a surprisingly low 5 percent of the new jobs created in Texas will be in high-technology occupations. One factor keeping this figure low is that in this analysis, the Comptroller's Office is sticking to its relatively conservative definition of high-tech industries, as those that produce primarily high-tech outputs. This definition includes computer, electronics, aerospace, and instruments manufacturing; communications, data processing; and software development. If, as some have proposed, high-tech is defined as an industry that uses a high proportion of high-tech inputs, practically any industry could be defined as high-tech.
Based on the conservative definition, TWC projections indicate that only four high technology occupations--systems analysts, computer and electrical engineers, and computer programmers--will produce more than 10,000 new jobs over 10 years. Although these estimates may sound a little low, they are consistent with recent Comptroller projections of high-tech jobs by industry.
Probably one of the most discussed results of national, state and local occupational projections is that most of the gains will be in occupations characterized by lower wage rates and higher unemployment than average. TWC's projections support this expectation. Just over half of the new jobs created in the state over the next 10 years will be in these occupations. The lion's share of these new jobs will be among cashiers and retail salespersons; child care workers; general office clerks and other less-skilled office positions; cooks, waiters/waitresses and other food service workers; and home/health care aides, nursing aides and orderlies (see Table 7).Education and Training Requirements: Is a Liberal Arts Degree Still Useful?
The overall outlook, however, includes a more positive side. Higher paying, high skilled occupations will account for the remaining half of the jobs. Here, the bulk of the higher paying jobs created in the state will be in various levels of managers, executives, administrators, and supervisors. Other sources of attractive new jobs will be in computer, engineering, and business related positions; nurses; truck drivers; doctors, lawyers, and other professionals; and teachers, college and university faculty.
As expected, most (but not all) of the higher paying jobs over the next 10 years will require a relatively high level of education and, in some cases, experience. According to the U.S. Bureau of Labor Statistics, one-quarter of the state's new positions will require at least a Bachelor's degree from an accredited college or university. Of these, doctors, lawyers, and other professionals will need an M.D., J.D., or related professional degree. College and university faculty will need a Ph.D. degree, or, at least, a Master's in their field to teach undergraduate students. Future systems analysts; computer and other engineers; mathematicians and scientists; and business analysts will require a specialized computer, engineering, or business-related degree. Elementary/secondary teachers and social workers, on the other hand, will need to obtain a degree in education or social work (see Table 8).
The value of a general liberal arts degree, however, however is not dead. Of the positions requiring a Bachelor's degree, almost one-quarter will be available to liberal arts graduates with related work experience. Over the next 10 years, a wide range of executive, administrative, and management occupations will become available to productive liberal arts graduates with sufficient work experience in that industry.
On the flip side of the equation, a little more than 60 percent of the new jobs created in Texas during the next decade will require neither a college nor, in most cases, a high-school degree. All that will be required to fill these positions, mainly in retail trade and health/food-related services, will be short-term-and occasionally, moderate to long-term-training and experience in that field. In fact, of all the new jobs requiring short to long-term training and experience, only truck drivers, maintenance repairers, technicians, electricians, carpenters, and other experienced construction workers will buck the trend by receiving relatively high wage rates.
The job outlook for potential workers without a college degree, however, is not entirely grim. Without a Bachelor's degree, the major route to high wage/low unemployment occupations over the next 10 years will be through an associate degree from a junior/technical college, sufficient work experience in a related occupation, or formal post-secondary vocational training. According to the Workforce Commission projections, registered nurses; marketing, sales and clerical supervisors; sales representatives; food service and lodging managers; automobile mechanics; and licensed practical nurses will be the major sources of this set of attractive new jobs in the state. Overall, almost 15 percent of the new jobs created in Texas over the next 10 years will be in this alternative non-degreed route to higher paying occupations.
2 The Texas Workforce Commission's occupational projections were done in 1995. They therefore missed much of the state's stronger employment growth seen in the last half of the decade, which the Comptroller's Fall 1999 forecase has captured.