United States Department of Labor

Congressional Testimony

STATEMENT OF Keith Hall
Commissioner
Bureau of Labor Statistics

before the
COMMITTEE ON Appropriations
Subcommittee on Labor, Health and Human Services, Education, and Related Agencies

U.S. HOUSE OF REPRESENTATIVES

MARCH 25, 2009

Thank you for the opportunity to discuss the Bureau of Labor Statistics' occupational outlook information with you.

I will provide a brief overview of the current economy and then discuss long-term employment trends through 2016, with special attention to occupations with above average wages and large numbers of job openings, as well as those with above average growth rates. In light of the Committee's interest in healthcare, I will address this field specifically.

Finally, concerning a topic currently of intense interest -- "green jobs" -- I want to briefly discuss with you the challenge of measuring the number and characteristics of these jobs.

The current economy. As you know, the Nation is in the midst of a sharp and widespread contraction of the labor market. Since the start of the recession in December 2007, 4.4 million payroll jobs have been lost, and the unemployment rate has increased from 4.9 to 8.1 percent, the highest level in over 25 years. Job losses have occurred in nearly all major industry sectors; employment has grown only in healthcare, private education, and government. Unemployment is up among all major demographic groups, and the number of people working part time involuntarily has jumped by 4.0 million. Job losses have occurred throughout the country, and, in January, 4 states had unemployment rates above 10 percent.

BLS projections. The BLS prepares long-term national projections every two years, including the labor force, industry output, and industry and occupational employment. The most recent projections were published in December 2007 for the 2006-2016 period.

The projections are widely used by individuals and career guidance counselors for career exploration, by public officials for policy decisions regarding workforce development, and for many other purposes. Our State partners use BLS projections as an input into state and area projections, which help drive the State and local decisions on education, training and workforce policy and funding, as well as helping individuals in their career decision-making and job search.

The projections describe the composition of a full-employment economy in 2016, and the change in employment by industry and occupation required to achieve that economy. We make specific assumptions about several economic, demographic, and policy topics, such as rates of productivity growth. We conduct a series of analytical processes ranging from econometric and time-series modeling to explicitly subjective analysis.

We use data from many sources, including the Current Employment Statistics, Occupational Employment Statistics, and Producer Price programs, along with labor force data from the Current Population Survey and productivity data. We also use data from other Federal statistical agencies, primarily the Census Bureau and the Bureau of Economic Analysis.

Impact of the recession on projections. I want to note that the 2006-2016 projections were completed before the current economic downturn and therefore are based on a pre-recession perspective of the economy. The impact of the current recession on the accuracy of our depiction of a full-employment economy in 2016 projections is uncertain. It may not be clear for some time whether the recession will have permanent impacts on the structure of the economy and on the long-term trends that are the focus of the projections analysis.

Broad trends. To put the occupational projections into context, let me briefly review the broad trends. We expect growth in the labor force and total employment to slow, and the decline in manufacturing employment and shift towards services employment to continue. We project the labor force to grow at an annual rate of 0.8 percent between 2006 and 2016, down from a 1.2 percent rate during the previous decade (1996-2006). Nonagricultural wage and salary employment is projected to grow at an annual rate of 1.0 percent over 2006-2016, slower than the 1.3 percent annual rate during 1996-2006.

Manufacturing employment is projected to decline at an annual rate of -1.1 percent, down 1.5 million jobs over the decade. Manufacturing output is expected to grow, however, reflecting continued increases in productivity. Declining employment is also projected for the mining, federal government, and utilities industries. All other major industry groups are projected to gain jobs, with the most rapid growth expected in health care and social assistance at 2.4 percent annual growth, professional and business services at 2.1 percent, and educational services at 1.9 percent. (See charts 1 and 2.)

Occupational trends. Turning to occupations, we categorize occupational employment into 10 major groups. The three largest major groups are professional and related occupations, service occupations, and office and administrative support occupations, with 2006 employment of 30 million, 29 million, and 24 million, respectively. These 3 groups accounted for well over half of the Nation's total employment. The smallest occupational group is farming, forestry, and fishing occupations, with just 1 million jobs. (See chart 3.)

Total employment is expected to grow about 10 percent over the decade, resulting in 15.6 million new jobs. The two groups with the largest employment in 2006 — professional and related occupations and service occupations — also are expected to grow faster than any other groups, with each increasing by 17 percent. (See chart 4.)

Because of their large size and projected fast growth, these 2 groups also will add the most new jobs to the economy — nearly 10 million — accounting for more than 60 percent of all new jobs. (See chart 5.) Both groups include detailed occupations that are concentrated in the large and fast-growing health care and social assistance and professional and business services industries, such as registered nurses, home health aides, and computer software engineers

These 2 major groups also represent the opposite ends of education and earnings ranges. Many occupations in the professional and related group pay wages above the median for all occupations and require higher levels of education or training, while many service occupations pay lower wages and require less education or training.

Two occupational groups are expected to decline over the long term, continuing their past trends. Farming, forestry, and fishing occupations are projected to decline by 3 percent, losing 29,000 jobs, and production occupations are projected to decline by 5 percent, losing over half a million jobs. Production occupations are concentrated in manufacturing, where strong productivity growth and rising import penetration will lower demand for workers.

All other groups are expected grow at or below the 10 percent average rate of growth. Expected job gains in these groups range from 1.7 million for office and administrative support occupations to about 462,000 for transportation and material moving occupations.

So far, I have mentioned only job growth. However, job openings arise not just when new jobs are added to the economy, but also when existing jobs become permanently vacant, such as when workers retire. This second source, known as replacement needs, is expected to generate 33.4 million job openings, or more than twice as many openings as job growth alone.

For this reason, examining job openings information, instead of focusing primarily on fast growth, provides a more complete picture of expected job opportunities and the extent of training that must be provided to prepare workers to fill these jobs.

As the baby boom generation ages, retirements will create many replacement openings. Replacement needs also are strong in occupations — such as waiters and waitresses — that employ large numbers of young workers who usually work in such occupations temporarily before leaving for more permanent employment elsewhere.

Large occupations are likely to be the source of large numbers of job openings regardless of whether they are growing rapidly. Some occupations that are not growing, or are even declining, can generate significant numbers of openings because of replacement needs. On the other hand, many rapidly-growing occupations are small in employment and, therefore, will add relatively few openings.

When the two sources for job openings — growth and replacements — are added together, a different picture emerges than given by expected job growth. Service occupations, where replacement needs are high, top the list, and are expected to generate more than 12 million total job openings. Although professional and related occupations are expected to add more new jobs than service occupations, replacement needs are lower. This group is expected to generate 11 million job openings. (See chart 6.)

Detailed occupations. To examine detailed occupations, I will refer to 2 tables. Table 1 lists the 30 occupations expected to be the fastest-growing and also have wages above the median. Table 2 lists the 30 occupations expected to have the most job openings and also have wages above the median.

Many of the fastest-growing higher wage occupations are related to information technology and health care. Of the 30 occupations listed in Table 1, six are computer-related, including network systems and data communication analysts (53 percent growth and $64,600 ); computer software engineers, applications (45 percent and $79,780); and computer systems analysts (29 percent and $69,760). Demand for computer occupations is driven by organizations' need to adopt and integrate increasingly sophisticated and complex technologies, and to address computer network security issues.

Eight health-related occupations fall into the top 30 list of fastest growth, higher wage occupations, and include physical therapist assistants (32 percent and $41,360), dental hygienists (30 percent and $62,800), and mental health counselors (30 percent and $34,380). I will discuss health occupations in more detail later.

Every occupation listed in Table 1 has at least some postsecondary education as its most significant source of education or training. For most, a bachelor's degree or higher is typically required.

As I noted earlier, fast-growing occupations do not necessarily generate large numbers of job openings, including replacement needs as well as new jobs. Occupations that were relatively large in 2006 will have many openings, despite their sometimes slower growth. Table 2 indicates that several education, health-related, and computer-related occupations are among those with the most job openings and that pay relatively well.

Unlike many of the fastest growing occupations, some level of education or training below the bachelor's level is sufficient for many occupations in Table 2, including truck drivers (moderate-term on-the-job training) and bookkeeping, accounting, and auditing clerks (moderate-term on-the-job training).

Education and training requirements. In addition to information on job growth, job openings, and wages, it is important to be aware of the education and training requirements for in-demand occupations. To provide this information, we classify occupations by the most significant source of education or training required for entry. The education and training categories range from short-term on-the-job training to a graduate degree.

Occupations falling in the categories generally requiring a postsecondary award or degree are projected to have faster than average growth between 2006 and 2016. However, the largest number of new jobs — 4.6 million — is expected in occupations in the short-term on-the-job training category. Many of these are service occupations, such as retail salespersons, home health aides, janitors and cleaners, waiters and waitresses, child care workers, and landscaping and groundskeeping workers. An additional 3.1 million new jobs are expected to require a bachelor's degree, many of which are professional and related, such as computer software engineers, applications; accountants and auditors; and elementary school teachers. (See chart 7.)

Healthcare occupations. Increasing demand for healthcare services will generate significant employment growth throughout the healthcare sector. The primary driver of this growth is an aging population. The number of people in older age groups, with substantially more health care needs than younger cohorts, will grow faster than the total population over the next decade. Advances in medical technology will continue to improve the survival rate of severely ill and injured patients, who will then need extensive therapy and care. At the same time, cost-containment policies will generate faster-than-average growth in demand for healthcare workers who assist health care practitioners and have lower training requirements.

In presenting healthcare occupations, we look at two groups: health care practitioners and technical occupations, which are found in the professional and related major group, and healthcare support occupations, which are found in the service occupations major group.

Health care practitioners and technical occupations accounted for 7.2 million jobs in 2006 and are projected to add 1.4 million new jobs over the decade and generate 279,000 job openings annually. (See table 3.) Technological advances in medicine will lead to increased demand for more medical procedures and the workers who perform them. Physicians and surgeons are projected to add about 90,000 jobs. Registered nurses, already the largest healthcare occupation with 2.5 million jobs in 2006, is projected to add about 587,000 new jobs. Strong employment growth is projected for many healthcare technicians and assistants as these workers become more productive and perform more medical procedures that have been typically performed by healthcare practitioners. For example, physician assistants are projected to add about 18,000 jobs, while physical therapists are projected to add about 47,000 jobs.

Healthcare support occupations accounted for 3.7 million jobs in 2006 and are projected to add 1 million jobs over the 2006-2016 decade. (See table 3). The broad occupation of nursing, psychiatric, and home health aides, accounting for 2.3 million jobs in 2006, is expected to add 647,000 jobs through 2016 as demand increases for these lower-cost workers. Home health aides, in particular, are projected to experience much faster than average employment growth. An emphasis on less costly home care and outpatient treatment of the elderly population, as opposed to expensive institutional care, will lead to a growing number of aides who provide in-home health care. In addition, patients of all ages are being sent home from hospitals and nursing facilities more quickly, and they often require continued health care at home. Other large and fast growing healthcare support occupations include medical assistants, projected to increase 35 percent between 2006 and 2016, and dental assistants, projected to increase 29 percent.

Measuring green jobs. Any time there are emerging industries or occupations, there is a growing need by households, businesses, and policy-makers to understand and evaluate the levels and types of jobs created. This often requires us to adapt and/or expand our programs and generates some measurement challenges.

BLS produces comprehensive employment and wage data for 670 industries and over 800 occupations following the North American Industrial Classification System (NAICS) and the Standard Occupational Classification (SOC) system, respectively. While we can identify some of the industries and occupations that are likely to have green jobs, most green activities either cut across industries and occupations or account for a subset of activity within an individual industry and occupational category.

For example, retrofitting buildings to increase energy efficiency currently falls within the construction industry, but likely supports only a small fraction of the current 6.6 million construction jobs in the U.S. There are, of course, a few industries where this problem does not exist. For example, the production of renewable electric power exactly matches the hydroelectric and other electric power generation industries in the current NAICS.

Accurately measuring employment in green industries and in green occupations will therefore require additional research and data collection to supplement our existing information on industries and occupations. We are developing approaches that include surveying establishments in industries where green activity is expected to occur to identify both the extent they are performing green activities and the occupations of the employees who are doing such work.

An additional challenge for us will come from the number of alternative definitions of what constitutes green activity. For example, the White House Task Force on the Middle Class defined green activity quite broadly as anything dealing with some aspect of environmental improvement. They concluded that "definitions of green jobs are so broad at this point in time, it is impossible to generate a reliable count of how many green jobs there are in America today." There will likely always be some alternative definitions of green jobs since many are driven by specific policy initiatives. For example, the Green Jobs title of the Energy Independence and Security Act of 2007 (co-sponsored by Secretary of Labor Solis during her time in Congress) focuses on a number of energy efficiency and renewable energy industries.

BLS welcomes the opportunity to help inform the discussion on green jobs. We are learning more about the questions being asked and about green technology so we can fashion a useful and measurable definition – or perhaps multiple definitions.