Located in:
- II. Strategic Elements
The Unified or Combined State Plan must include a Strategic Planning Elements section that analyzes the State’s current economic environment and identifies the State’s overall vision for its workforce development system. The required elements in this section allow the State to develop data-driven goals for preparing an educated and skilled workforce and to identify successful strategies for aligning workforce development programs. Unless otherwise noted, all Strategic Planning Elements apply to Combined State Plan partner programs included in the plan as well as to core programs.
- a. Economic, Workforce, and Workforce Development Activities Analysis
The Unified or Combined State Plan must include an analysis of the economic conditions, economic development strategies, and labor market in which the State’s workforce system and programs will operate.
- a. Economic, Workforce, and Workforce Development Activities Analysis
II. a. 1. A. Economic Analysis (A.I -A.III)
The Unified or Combined State Plan must include an analysis of the economic conditions and trends in the State, including sub-State regions and any specific economic areas identified by the State. This must include-
i. Existing Demand Industry Sectors and Occupations
Provide an analysis of the industries and occupations for which there is existing demand.
ii. Emerging Industry Sectors and Occupation
Provide an analysis of the industries and occupations for which demand is emerging.
iii. Employers’ Employment Needs
With regard to the industry sectors and occupations identified in 1 and 2 above, provide an assessment of the employment needs of employers, including a description of the knowledge, skills, and abilities required, including credentials and licenses.
Current Narrative:
A more thorough analysis is found in Appendix F which provides much more information for the all the areas mentioned above, including information on the state’s nascent research pertaining to skills gaps analysis and information on the knowledge skills and abilities needed by employers in select occupations. Appendix G provides regional economic and workforce profiles for areas of the state that will be engaged in regional planning efforts under the policy direction of this State Plan.
California’s Economy is Big and Growing
With a gross domestic product (GDP) of over $2.1 trillion in 2014, a labor market with more than 19 million participants, and a nonfarm economy with over 16 million jobs, California has the largest economy of any state in the nation. Between 2009 and 2014, the economy grew by $198 billion, growing 1.1. percent in 2010, 1.2 percent in 2011, 2.5 percent in 2012, 2.3 percent in 2013, and 2.4 percent in 2014. Between February 2010 and February 2014, California recovered the 1.3 million jobs it lost during the Great Recession and the state is currently enjoying sustained economic growth, both in terms of GDP and jobs.
This chapter contains information on the state and regional economy through July 2015. Since then, the economy has continued to grow in terms of jobs, reduced unemployment and gross state product. More recent data and ongoing analyses are provided by the Labor Market Information Division (LMID) of EDD and the State Department of Finance on their websites.
The Great Recession and Its Aftermath
U.S. economic business cycles are officially arbitrated and dated by the National Bureau of Economic Research (NBER) based on their analysis of a basket of economic indicators, including real GDP, real income, employment, industrial production, and wholesale-retail sales. According to NBER, the U.S. Great Recession began December 2007 and ended in June 2009. California’s economy, however, entered recession in July 2007 and emerged from recession later than the nation as a whole, beginning its recovery seven months later in February 2010.[1] Relevant details pertaining to the recession include the following:
- California lost 1,333,000 nonfarm jobs from July 2007 through February 2010, a decline of 8.6 percent, and about one of every twelve of the state’s nonfarm jobs.
- By the time the recession ended, all of California industry sectors had experienced substantial job losses with one notable exception.
- Educational and health services added 117,800 jobs over the period.
- Construction (335,900) experienced the largest job loss in number over the period, followed by trade, transportation, and utilities (311,000).
- Three additional industry sectors lost more than 100,000 jobs: manufacturing (226,100), professional and business services (222,500), and financial activities (137,700).
- Additionally, all regional labor markets in the state experienced substantial job losses during the recession.[2]
- The Southern regional labor market, which includes Los Angeles, Ventura, Orange, Riverside, and San Bernardino Counties, lost 689,900 jobs.
- Nonfarm job losses in the state’s seven remaining regional labor markets ranged from a high of 251,000 in the San Francisco Bay Area to a low of 5,300 jobs in the Eastern Sierra, the state’s smallest regional labor market (which includes Amador, Calaveras, Inyo, Mono, Mariposa, and Tuolumne Counties).
- Overall unemployment in California skyrocketed during the Great Recession. From its pre-recession low of 4.9 percent during the months of March 2006 through December 2006, California’s seasonally adjusted unemployment rate rose by 7.3 percentage points to a peak of 12.2 percent in the months of February through April and September and October of 2010.
- The number of unemployed rose from a pre-recession low of 859,000 persons in August and September 2006 to a peak of 2,231,000 in October 2010, an increase of nearly 1.4 million persons (160 percent).
- All of California’s regional labor markets experienced steep increases in unemployment during the Great Recession.
- Unemployment rate increases in California’s regional labor markets over this same period ranged from a low of 5.9 percentage points in the San Francisco Bay Area and Coastal regional labor markets to a high of 8.8 percentage points in San Joaquin Valley.
- The unemployment rate in each of California’s 58 counties rose by 4.0 percentage points or more.
- All demographic groups experienced rising unemployment:
- The unemployment rate among California men rose by 8.1 percentage points compared to 6.4 percent among women.
- Unemployment rates rose among all of California’s major racial and ethnic groups between March 2007 and December 2010, with the largest increase occurring among African Americans (9.8 percentage points) and Latinos (9.2 percentage points) and the smallest increases occurring among Asians (6.0 percentage points) and Whites (7.3 percentage points).
- Unemployment was strongly correlated with age (work experience) and education (skill level), with inexperienced youths and less educated or unskilled workers suffering most.
- The unemployment rate among youths age 16 to 24 increased from 10.8 percent in March 2007 to 22.8 percent in December 2010. In contrast, the unemployment rate among prime working age Californians age 25 to 54 increased from 3.9 percent in March 2007 to 10.9 percent in December 2010.
- The unemployment rate among California workers who attained less than a high school diploma shot up from 9.3 percent in March 2007 to 19.1 percent in December 2010, an increase of 9.9 percentage points.
- High school diploma holders and workers who had attended some college but hadn’t received a degree fared little better, experiencing unemployment rate increases of 9.7 and 9.3 percentage points, respectively.
- In contrast, the unemployment rate among associate degree holders and those with a bachelor’s degree or higher increased by 6.5 and 4.0 percentage points over the same period. The unemployment rate among workers with a Bachelor’s degree or higher stood at just 6.7 percent in December 2010.
- In real terms, California GDP fell from $2.0 trillion in 2008 to $1.9 trillion in 2009, a decrease of 4.4 percent. The state lost $88 billion in economic activity in a single year.
Economic Recovery in the Aggregate
California total nonfarm employment finally bottomed out in February 2010 and the economy has been expanding ever since. However, the recovery from the recession was initially a slow and arduous process. It took until February 2014 for California to recover the 1,333,000 nonfarm jobs it lost during the 31-month period from July 2007 to February 2010. Fortunately, California’s economic and employment growth since February 2014 has been strong:
- California total nonfarm payrolls grew by 2,027,700 jobs from February 2010 through July 2015, an increase of 14.4 percent over this 65-month period.
- Over the first 22 months of the expansion, or from February 2010 through December 2010, the California economy added 342,200 jobs, growing 15,600 nonfarm jobs per month or 1.3 percent.
- Beginning in 2012, California’s economic expansion took off. The state gained 1,685,500 jobs from December 2011 through July 2015, growing at a remarkably consistent pace of 39,200 jobs per month, or 3.3 percent annually.
- Ten of California’s eleven industry sectors gained jobs including the following:
- Professional and business services added 412,000 jobs, the most of any sector over this period.
- Educational and health services added 391,100 jobs.
- Leisure and hospitality added 274,400 jobs.
- Trade, transportation, and utilities added 253,500 jobs.
- In percentage terms, construction enjoyed the fastest job growth, growing at an annualized pace of 7.3 percent.
- Looking at the entire February 2010 to July 2015 expansion, professional and business services gained the most jobs, 541,200 with half, or about 273,000 jobs, occurring in the professional, scientific, and technical services subsector. Educational and health services had the second largest job gain with 454,500, four-fifths of which occurred in the health care and social assistance subsector.
In July 2015, California total nonfarm employment exceeded its pre-recession peak in July 2007 by 694,700 jobs. In this same month, employment increased in six industry sectors: educational and health services; professional and business services; leisure and hospitality; other services; trade, transportation, and utilities; and mining and logging. However, as of July 2015, employment in five industry sectors had yet to return to their July 2007 levels. These included the following: manufacturing, construction, financial activities, government, and information.
Demand and Growth Industries in the Recovery
Four industry sectors have driven the expansion: professional and business services; educational and health services; leisure and hospitality; and construction (even though employment still has not returned to July 2007 levels in construction). Within these sectors are a range of high, middle, and low paying industries. However, the drivers of California’s economy have been in the high technology and information services subsectors (including social media), international trade, and in the recovering housing market. table 1, on the next page, details the California industry subsectors that experienced the largest job gains and grew at the fastest rate over the three years ending in July 2015.[3]
- Several information technology industries are among California’s fastest growing industries, including: other information services; data processing, hosting, and related services; computer systems design and related services; management, scientific, and technical consulting services; electronic computer manufacturing; and specialized design services. These tend to be high paying industries that demand highly skilled workers.
- California’s fastest growing industries also include several industries associated with California’s rebounding housing and construction sector, including but not limited to: building material and garden equipment and supply dealers; building finishing contractors; residential and nonresidential building construction; building foundation and exterior contractors; lumber and other construction materials merchant wholesalers; and offices of real estate agents and brokers. These industries tend to employ middle-skilled workers and pay middle-level wages.
Table 1: California’s Fastest Growing Industries Over the Last Three Years of the Economic Expansion (July 2012 - July 2015; Not Seasonally Adjusted Data)
| Largest Job Gains | |
|---|---|
| Educational Services, Health Care, and Social Assistance | 26.5% |
| Professional & Business Services | 24.6% |
| Leisure & Hospitality | 18.9% |
| Wholesale Trade | 16.0% |
| Information | 15.7% |
| Mining and Logging | 14.8% |
| Retail Trade | 14.2% |
| Transportation, Warehousing & Utilities | 13.7% |
| Financial Activities | 11.5% |
| Other Services (excludes 814-Private Household Workers) | 10.0% |
| Government | 4.1% |
| Manufacturing | -3.2% |
Source: California Employment Development Department, Labor Market Information Division
Middle-skilled occupations are those that require more than a high school education but less than a four-year degree. The top twenty-five middle-skilled occupations (see table 5) that are expected to generate the most middle-skill job openings are projected to account for nearly 497,000 job openings during the 2012-2022 period. These openings include approximately 225,000 openings due to job growth and 272,000 due to replacement needs.[4]
- Registered nurses top the list with 92,300 openings during the period.
- Ten of the top twenty-five occupations are in a health care related field and are expected to generate 256,000 openings during the ten-year period.
- Annual salaries range from $19,115 for manicurists and pedicurists to $100,312 for dental hygienists.
- An analysis of the knowledge, skills, and abilities required by these jobs is available below:
| KNOWLEDGE | Administration and Management | Biology | Chemistry | Clerical | Communications and Media | Computers and Electronics | Customer and Personal Service | Education and Training | Engineering and Technology | English Language | Geography | Law and Government | Mathematics | Mechanical | Medicine and Dentistry | Personnel and Human Resources | Philosophy and Theology | Production and Processing | Psychology | Public Safety and Security | Sales and Marketing | Sociology and Anthropology | Telecommunications | Therapy and Counseling | Transportation |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Registered Nurses | N | Y | N | Y | N | N | Y | Y | N | Y | N | N | Y | N | Y | N | N | N | Y | N | N | Y | N | Y | N |
| Teacher Assistants | N | N | N | Y | N | Y | Y | Y | N | Y | Y | N | Y | N | N | N | N | N | Y | N | N | Y | N | Y | N |
| Heavy and Tractor-Trailer Truck Drivers | Y | N | N | N | N | N | Y | Y | N | Y | Y | Y | Y | Y | N | N | N | N | N | Y | N | N | N | N | Y |
| Nursing Assistants | N | N | N | Y | N | Y | Y | Y | N | Y | N | N | N | N | Y | Y | N | N | Y | Y | N | N | N | Y | N |
| Medical Assistants | Y | N | N | Y | N | Y | Y | Y | N | Y | N | N | N | N | Y | N | N | N | Y | Y | N | N | N | Y | N |
| Licensed Practical and Licensed Vocational Nurses | N | N | Y | Y | N | N | Y | Y | N | Y | N | N | Y | N | Y | N | Y | N | Y | N | N | N | N | Y | N |
| Computer User Support Specialists | Y | N | N | Y | Y | Y | Y | Y | Y | Y | N | N | Y | N | N | N | N | N | N | N | N | N | Y | N | N |
| Preschool Teachers, Except Special Education | Y | N | N | N | N | N | Y | Y | N | Y | Y | N | N | N | N | N | Y | N | Y | Y | N | Y | N | Y | N |
| Hairdressers, Hairstylists, and Cosmetologists | Y | N | Y | N | Y | N | Y | Y | N | Y | N | N | Y | N | N | Y | N | N | Y | N | Y | N | N | N | N |
| Dental Assistants | N | N | Y | Y | N | Y | Y | Y | N | Y | N | N | N | N | Y | N | N | Y | Y | N | Y | N | N | N | N |
Source: U.S. Department of Labor’s Occupational Information Network (O*NET) at www.onetonline.org.
| SKILLS | Active Learning | Active Listening | Complex Problem Solving | Coordination | Critical Thinking | Equipment Maintenance | Instructing | Judgment and Decision Making | Learning Strategies | Monitoring | Operation and Control | Operation Monitoring | Persuasion | Reading Comprehension | Service Orientation | Social Perceptiveness | Speaking | Time Management | Writing |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Registered Nurses | Y | Y | N | Y | Y | N | Y | N | N | Y | N | N | N | Y | Y | Y | Y | N | N |
| Teacher Assistants | N | Y | N | Y | Y | N | Y | N | Y | Y | N | N | N | Y | Y | Y | Y | N | N |
| Heavy and Tractor-Trailer Truck Drivers | N | Y | Y | N | Y | Y | N | N | N | Y | Y | Y | N | Y | N | N | Y | Y | N |
| Nursing Assistants | Y | Y | N | Y | Y | N | N | N | N | Y | N | N | N | Y | Y | Y | Y | N | Y |
| Medical Assistants | Y | Y | N | Y | Y | N | N | N | N | Y | N | N | N | Y | Y | Y | Y | N | Y |
| Licensed Practical and Licensed Vocational Nurses | N | Y | N | Y | Y | N | N | Y | N | Y | N | N | N | Y | Y | Y | Y | Y | N |
| Computer User Support Specialists | Y | Y | N | Y | Y | N | Y | N | N | Y | N | N | N | Y | Y | N | Y | N | Y |
| Preschool Teachers, Except Special Education | N | Y | N | Y | Y | N | N | N | Y | Y | N | N | N | Y | Y | Y | Y | Y | N |
| Hairdressers, Hairstylists, and Cosmetologists | Y | Y | N | N | Y | N | Y | N | Y | Y | N | N | Y | N | Y | Y | Y | N | N |
| Dental Assistants | Y | Y | N | N | Y | N | Y | N | N | Y | N | N | N | Y | Y | Y | Y | N | Y |
Source: U.S. Department of Labor’s Occupational Information Network (O*NET) at www.onetonline.org.
| ABILITIES | Arm-Hand Steadiness | Control Precision | Deductive Reasoning | Far Vision | Finger Dexterity | Fluency of Ideas | Inductive Reasoning | Information Ordering | Manual Dexterity | Multilimb Coordination | Near Vision | Oral Comprehension | Oral Expression | Originality | Problem Sensitivity | Rate Control | Reaction Time | Response Orientation | Speech Clarity | Speech Recognition | Static Strength | Trunk Strength | Visual Color Discrimination | Visualization | Written Comprehension | Written Expression |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Registered Nurses | N | N | Y | N | N | N | Y | Y | N | N | Y | Y | Y | N | Y | N | N | N | N | Y | N | N | N | N | Y | Y |
| Teacher Assistants | N | N | N | N | N | N | Y | Y | N | N | Y | Y | Y | N | Y | N | N | N | Y | Y | N | N | N | N | Y | Y |
| Heavy and Tractor-Trailer Truck Drivers | N | Y | N | Y | N | N | N | N | N | Y | Y | Y | Y | N | N | Y | Y | Y | N | N | Y | N | N | N | N | N |
| Nursing Assistants | N | N | Y | N | N | N | N | N | N | N | Y | Y | Y | N | Y | N | N | N | Y | Y | Y | Y | N | N | Y | N |
| Medical Assistants | N | N | Y | N | N | N | Y | N | N | N | Y | Y | Y | N | Y | N | N | N | Y | Y | N | N | N | N | Y | Y |
| Licensed Practical and Licensed Vocational Nurses | N | N | Y | N | N | N | Y | Y | N | N | Y | Y | Y | N | Y | N | N | N | N | Y | N | N | N | N | Y | Y |
| Computer User Support Specialists | N | N | Y | N | N | N | Y | Y | N | N | Y | Y | Y | N | Y | N | N | N | Y | N | N | N | N | N | Y | Y |
| Preschool Teachers, Except Special Education | N | N | Y | N | N | Y | N | Y | N | N | N | Y | Y | Y | Y | N | N | N | N | Y | N | N | N | N | Y | Y |
| Hairdressers, Hairstylists, and Cosmetologists | Y | N | Y | N | Y | Y | N | N | Y | N | Y | Y | Y | N | N | N | N | N | N | N | N | N | Y | Y | N | N |
| Dental Assistants | Y | N | Y | N | N | N | Y | N | N | N | Y | Y | Y | N | Y | N | N | N | N | Y | N | N | N | N | Y | Y |
As noted in the previous section the new BLS national projections indicate that nearly 4 job openings will come from replacement for every 1 opening caused by job growth. So the 2012-2022 projections shown below will be revised to account for the substantial job growth that occurred between 2012 and 2014, as well as the growing retirements that will occur between 2022 and 2024, tipping the balance of job openings strongly toward replacing existing workers.
The State Plan recognizes and encourages regional partners to be aware of the importance of understanding replacement job openings for employers, workers and students.
The projections below are in the process of being updated by LMID.
Table 5: CA’s Top 25 Middle-Skilled Occupations with Replacement Needs (2012-2022)
For the table below, middle-skilled occupations are defined as occupations that require some college, a postsecondary non-degree award, or an associate’s degree as defined by education levels provided by the U.S. Department of Labor’s Bureau of Labor Statistics in 2012.
| Average Annual Job Openings SOC Code* | Occupational Title | New Jobs [1] | Replacement Needs [2] | Total Jobs [3] | 2014 First Quarter Wages [4] Median Hourly | 2014 First Quarter Wages [4] Median Annual |
|---|---|---|---|---|---|---|
| 29–1141 | Registered Nurses | 4,300 | 4,930 | 9,230 | $45.87 | $95,415 |
| 25–9041 | Teacher Assistants | 1,190 | 3,280 | 4,470 | [5] | $29,623 |
| 53–3032 | Heavy and Tractor–Trailer Truck Drivers | 2,240 | 2,180 | 4,410 | $19.77 | $41,117 |
| 31–1014 | Nursing Assistants | 2,310 | 1,870 | 4,180 | $13.66 | $28,426 |
| 31–9092 | Medical Assistants | 1,890 | 1,560 | 3,450 | $15.83 | $32,940 |
| 29–2061 | Licensed Practical and Licensed Vocational Nurses | 1,560 | 1,480 | 3,040 | $25.11 | $52,225 |
| 15–1151 | Computer User Support Specialists | 1,530 | 960 | 2,490 | $26.24 | $54,582 |
| 25–2011 | Preschool Teachers, Except Special Education | 250 | 1,570 | 1,820 | $15.26 | $31,727 |
| 39–5012 | Hairdressers, Hairstylists, and Cosmetologists | 810 | 950 | 1,750 | $11.07 | $23,045 |
| 31–9091 | Dental Assistants | 700 | 940 | 1,640 | $17.71 | $36,850 |
| 27–2011 | Actors | 400 | 1,100 | 1,500 | $40.83 | N/A |
| 29–2021 | Dental Hygienists | 510 | 560 | 1,060 | $48.23 | $100,312 |
| 15–1134 | Web Developers | 680 | 340 | 1,020 | $35.04 | $72,874 |
| 23–2011 | Paralegals and Legal Assistants | 530 | 490 | 1,020 | $27.44 | $57,081 |
| 49–2022 | Telecommunications Equipment Installers and Repairers, Except Line Installers | 600 | 380 | 980 | $30.72 | $63,897 |
| 33–2011 | Firefighters | 180 | 780 | 970 | $33.49 | $69,659 |
| 49–9021 | Heating, Air Conditioning, and Refrigeration Mechanics and Installers | 460 | 510 | 970 | $25.34 | $52,702 |
| 29–2012 | Medical and Clinical Laboratory Technicians | 450 | 420 | 870 | $20.48 | $42,593 |
| 29–2041 | Emergency Medical Technicians and Paramedics | 390 | 460 | 850 | $14.40 | $29,947 |
| 51–1011 | First–Line Supervisors of Production and Operating Workers | 60 | 740 | 800 | $26.70 | $55,539 |
| 29–2071 | Medical Records and Health Information Technicians | 340 | 440 | 780 | $19.61 | $40,782 |
| 39–5092 | Manicurists and Pedicurists | 550 | 190 | 740 | $9.19 | $19,115 |
| 25–4031 | Library Technicians | 90 | 550 | 640 | $19.89 | $41,359 |
| 31–9011 | Massage Therapists | 310 | 180 | 500 | $17.09 | $35,540 |
| 15–1152 | Computer Network Support Specialists | 190 | 290 | 470 | $35.44 | $73,724 |
Source: U.S. Bureau of Labor Statistics’ Current Employment Statistics (CES) March 2013 benchmark, Quarterly Census of Employment and Wages (QCEW) industry employment, and Occupational Employment Statistics (OES) data.