Wednesday, December 18, 2013

BLS Labor Market Projections in Retrospective

Tomorrow, the Employment Projections division of the Bureau of Labor Statistics will release its projections for the years 2012–2022. This is a red-letter day for me, something I look forward to every two years, and it will keep me quite busy over the coming weeks. (This blog may suffer as a result.)
I am sometimes asked how accurate these projections are. Of course, the BLS does not possess a crystal ball. Their economists work from a model of the economy that cannot possibly capture all of the forces that are at work, causing some occupations to expand and others to shrink. Today, on the eve of the next set of projections, I decided to look at the projections that the BLS made in 2002 for the year 2010.
The most noteworthy problem with the projections for 2010 is that they do not anticipate the Great Recession that we experienced a couple of years before that date—the worst economic slump since the 1930s. As a result, in 2002 the BLS seriously overestimated the size of the 2010 workforce, which was still in recovery from that downturn. The BLS projected a total 2010 workforce size of 168 million (15 percent growth from 2000), whereas the current estimate for 2010 is only 143 million (2 percent shrinkage from 2000).
The group of occupations that underperformed the most was Helpers, Construction Trades, shrinking by 44 percent instead of growing by the predicted 13 percent. This outcome reflects the collapse in housing that burst the pre-recession bubble; helpers, including apprentices, are the first to be laid off when not needed and the last to be hired back. Construction Trades Workers also saw a reduction in workforce size—25 percent—whereas the BLS had projected 13 percent growth. It’s interesting to contrast these occupations to the workforce of Construction Managers, which actually grew more than projected: by 70 percent rather than 16 percent.
Two other groups that underperformed substantially were Woodworkers—shrinking by 43 percent instead of growing by 9 percent—and Metal Workers and Plastic Workers—39 percent shrinkage instead of 9 percent growth. Evidently the BLS underestimated the amount of offshoring that the manufacturing industries would do. The BLS did project shrinkage for Textile, Apparel, and Furnishings Workers, but only 2 percent, whereas the actual contraction was 48 percent.
Besides construction and manufacturing, state and local governments took a big hit in the aftermath of the Great Recession. Starved for tax revenue, they had to lay off many workers. As a result, Protective Service Occupations grew by only 7 percent instead of the projected 26 percent, and K–12 teachers grew by 2 percent instead of the projected 17 percent.
Health-care workers were better insulated from the chill economic winds. For example, Health-Care Support Occupations grew by 31 percent, very close to the projected 33 percent. Health Diagnosing and Treating Practitioners grew by 24 percent, almost exactly at the projected 25 percent rate.
The boom in the petroleum industry is one positive trend that BLS did not anticipate. The workforce of Extraction Workers expanded by 17 percent instead of contracting by the projected 2 percent.
Business keeps chugging along. The workforce for Business and Financial Operations Occupations grew by 37 percent instead of the 17 percent projected. Management, however, underperformed, shrinking by 17 percent instead of growing by 12 percent.
By showing these figures, I don’t mean to tarnish the reputation of the Bureau of Labor Statistics. Some of the unanticipated trends that I mention here are likely to prove transitory once we get further away from the recessionary years. Overall, the BLS economists do us an immense service with their projections, and I will continue to cite the BLS projections as guideposts for career decisions. Of course, just as investors diversify their holdings and use other hedging strategies to guard against unanticipated outcomes, I advise career decision makers to diversify their skills and perhaps develop a career plan B. This is advisable not solely because of the inevitable imperfections of labor market projections; predictions of academic success and career satisfaction can also prove inaccurate. Just as the BLS can’t foresee every economic trend of the coming decade, neither can we predict everything that will be going on in our heads and hearts 10 years from now.

Friday, December 6, 2013

The Prison-Industrial Complex Is Losing Luster

The Department of Labor will release a new set of employment projections in only a couple of weeks from now, but I’m going to jump the gun and predict that the outlook for correctional officers and jailers will continue to be poor. The projection for the 2010–2020 period was for only 5 percent growth, compared to the average of 14 percent across all occupations. But isn’t the prison industry booming? If so, why such a lackluster outlook for the guards?

It’s true that the prison industry is currently doing very well. Nationwide, there are approximately 2.3 million inmates in state, federal, and private prisons. This is roughly double the number behind bars in 1990 and exceeds the number of prisoners in any other country.

However, there is a huge cost to this immense human inventory and to the infrastructure and labor force required to keep these prisoners behind bars. The federal government alone spends about $55 billion each year on its prisons. In the current climate of budget-cutting, even those who like to think of themselves as law-and-order crusaders are forced to question this expenditure.

Also, consider that violent crime is on a steady downward trend. To be sure, a very large fraction of those in prisons have either been convicted of nonviolent offenses, especially drug charges, or are being detained as undocumented aliens. But the state-by-state trend toward decriminalization of cannabis will result in fewer drug convictions. And the federal government has shifted its policy on drug offenders away from the harsh penalties enacted during heyday of the “war on drugs.” Finally, if—yes, it’s a big “if”—Congress can reform our immigration laws, we also should see a decline in those convicted of being here illegally.

Finally, the existence of a large workforce of correctional officers and jailers—an estimated 475,300 in 2010—creates public-health costs that are often overlooked but that are substantial. I am grateful to Caterina G. Spinaris, PhD, of Desert Waters Correctional Outreach for calling this to my attention, in response to a recent article in which I identified certain high-stress occupations. Research she participated in resulted in the estimate that 27% of corrections professionals suffer from post-traumatic stress disorder (PTSD). For security staff, the estimates were that 34.1% suffer from PTSD and 31.0% from depression. The Desert Waters research found significant, although lower, rates of PTSD and depression among other prison employees, such as clerical staff, chaplains, and maintenance workers.

These are all reasons to be hopeful that in the years ahead, prisons will not be the job-creators that they sometimes have touted as.