A Snapshot of Region 8 George A. Erickcek Brian Pittelko W.E. Upjohn Institute for Employment Research

March 6, 2014

Agenda • History and Forecast – Population – Employment – Base employment

• An examination of the region’s current economic and workforce situation • A deep dive into agri-business • Questions 1

More Retirees, 30-Somethings, and Tots Population Profile of Region 8 20,000 18,000

Number of Persons

16,000 14,000 12,000

2025

10,000 8,000

2012

6,000 4,000 2,000 0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

Age

2

Employment Growth Is Expected in Services Outside of Health and Tourism Employment Forecast

Thousands of year-round jobs

600 500

Other Services

400 300 200

Health Leisure and Hospitality

100 0 2000

Manufacturing Government

2005

2010

2015

2020

2025 3

Educational Attainment Appears to be an Issue Education Requirements of Education Postings 2013 requirements of 50% of postings are unknown.

Educational Attainment of Employed 2012 10% 7%

15% 36%

16% 11%

37% 12%

Dropout

28%

High school

28% Post. Sec.

Assoc. Bach. Grad. Note: Job postings contain an unknown mix of certifications and associates 4 Source: IPUMS USA 2012 & BurningGlass 2013. degrees.

The Number of Unemployed Persons Has Been Dropping but for the Wrong Reason Change in the Number of Persons Year

Unemployed

2008

4,203

-8,218

-4,015

2009

15,397

-30,492

-15,095

2010

-1,390

-5,966

-7,356

2011

-8,574

322

-8,252

2012

-5,677

155

-5,522

2013

-722

1,501

778

Source: BLS LAUS.

Employed

In the labor force

5

Unemployment Is a Problem for Young and Older Workers Age Profile of the Labor Force Percent of employment status

25 20

Unemployment looks low, but it is likely that many without jobs have dropped out of the workforce.

15 10 5 0 16–24

25–34

Unemployed

35–44

45–54

55–64

Employed 6

Source: IPUMS USA 2012.

Education Matters for Employment Percent of employment status

Educational Profile of the Labor Force 50 45 40 35 30 25 20 15 10 5 0 Less than HS High school

Some college

Unemployed

Associate's Bachelor's

Graduate

Employed 7

Source: IPUMS USA 2012.

What is with the 25-to-34 year olds? Age and Education 45

Percent of age group

40 11.0

35 30 25 20 15

11.5 5.1

8.6 17.3

16.0

12.3

15.1

10 5

9.4 10.9

12.7

9.3

10.7

10.6

35–44

45–54

55–64

Associate's

Bachelor's

0 25–34

4.5 65 and Older

Graduate 8

Source: IPUMS USA 2012.

The Area’s Manufacturers May Be Facing a Real Labor Problem within the Next 10 Years Age Profile of Occupations Percent of occupation group

30

48,439 Jobs 54,451 Jobs

25

370,112 Jobs

20 15 10 5 0 Production 16-24

Health 25-34

35-44

Other occupations 45-54

55-64 9

Source: IPUMS USA 2012.

Percent of County Employment Berrien Agriculture Construction Manufacturing Wholesale Retail Transport. Information Finance Real estate Prof. and tech. Management Admin. Education srv. Health care Arts, ent. Hospitality Other srv. Government

Branch

1.9 2.6 20.3 2.9 11.2 1.2 0.9 2.7 0.9 2.5 0.4 8.1 2.3 13.2 1.1 9.4 3.2 0.1

1.6 2.9 19.8 4.5 13.2 4.9 1.1 4.5 0.3 1.1 0.0 2.1 0.3 6.5 0.8 10.5 2.4 0.1

Calhoun

0.4 2.8 20.9 2.3 10.9 2.9 0.8 1.7 0.5 4.6 0.9 4.4 2.4 15.7 1.1 6.6 2.8 0.1

Cass

Kalamazoo

2.1 3.3 23.5 4.8 9.1 1.4 0.1 2.4 0.4 2.5 0.0 3.4 0.1 7.6 1.6 9.5 5.2 0.2

Source: Quarterly Census of Employment and Wages, 2012.

1.1 3.4 15.0 4.3 10.9 1.8 0.8 5.0 1.3 3.4 0.3 7.3 2.1 16.0 1.2 10.3 3.5 0.1

St. Joseph

2.0 2.3 37.9 2.2 12.9 2.2 0.5 2.1 0.8 1.7 0.0 1.7 0.1 8.2 0.8 6.0 2.9 0.2

Van Buren

9.3 3.1 12.2 2.4 12.5 1.9 0.5 1.5 0.5 1.8 3.1 4.0 0.1 7.8 1.2 9.9 2.8 0.1 10

Industry Distribution Across Counties Percent of the Region’s Employment By Sector Berrien Agriculture Construction Manufacturing Wholesale Retail Transport. Information Finance Real estate Prof. and tech. Management Admin. Education srv. Health care Arts, ent. Hospitality Other srv. Government

Branch

21.9 18.0 22.1 17.8 20.6 11.9 24.2 16.6 19.9 17.0 15.3 28.2 27.0 20.1 20.1 21.5 20.6 19.5

3.9 4.1 4.4 5.7 5.0 10.2 6.2 5.8 1.3 1.5 0.0 1.5 0.6 2.1 2.9 4.9 3.1 6.2

Calhoun

4.3 17.7 21.0 13.0 18.6 27.4 19.0 9.5 11.2 28.3 29.1 14.1 26.0 22.2 18.8 14.0 16.5 22.1

Cass

Kalamazoo

3.6 3.4 3.8 4.3 2.5 2.1 11 0.5 2.1 1.2 2.5 0.0 1.8 0.1 1.7 4.5 3.2 4.9 4.4

Source: Quarterly Census of Employment and Wages, 2012.

24.0 44.6 30.6 49.8 37.8 34.5 41.3 58.8 56.8 42.8 18.2 47.9 45.4 46.0 41.8 44.4 42.8 29.9

St. Joseph

7.8 5.2 13.8 4.6 8.0 7.5 4.5 4.3 5.9 3.9 0.0 2.0 0.5 4.2 5.0 4.6 6.2 6.9

Van Buren

34.6 6.9 4.3 4.8 7.5 6.3 4.4 3.0 3.7 4.0 37.4 4.6 0.3 3.9 6.9 7.4 5.9 10.9 11

The Region Clearly Has Three Employment Centers County of Residence

Berrien

Branch

Calhoun

Cass

Kalamazoo St. Joseph Van Buren

Berrien

62.1

0.2

0.4

2.1

2.1

0.5

2.0

Branch

1.9

34.0

7.5

0.2

3.9

5.4

0.6

Calhoun

0.6

1.9

57.0

0.1

8.5

0.8

0.3

11.3

0.3

1.1

20.9

4.4

3.6

2.7

Kalamazoo

1.9

0.3

6.1

0.2

66.9

1.8

3.6

St. Joseph

2.6

3.3

2.9

1.3

11.4

47.1

1.3

Van Buren

6.6

0.2

1.9

1.6

21.5

1.1

28.6

Cass

Note: Highlighted areas are commuting areas with a central county employing greater than 50 percent of its residents and outer counties with greater than 5 percent of residents commuting into the core county.

12 Source: Census On the Map, 2011 Primary Jobs.

All of Them Grow Out of the Traditional Regional Export Base Economic Model

Export activity

Non-export activity Indirect and Induced

Manufacturing goods Tourism Hospitals Regional shopping malls

Retirees’ amenities--Social Security

Convenience retail Outpatient medical Personal services Coffee shops 13

We Ship Out a Lot of Manufactured Goods AND Services, as Well Estimated Base Employment in Region 8 200,000 180,000

Other Services

160,000

Employment

140,000

Other Services

120,000 100,000 80,000

Manufacturing Manufacturing

60,000 40,000 20,000

Finance Finance

2000

2005

2010

Health Healthcare 2015

2020

2025 14

Revising an Old Model: A “Vertical” Flow Model Approach to Economic Development Attracting more activities

Standard Economic Development Practices Success is measured vertically

Econ. Activity

Econ. Assets

Building a more attractive environment

Environmental Nurturing 15

A Deep-Dive Scenario in Agri-Business Economic impact to 2025: • Fruit and vegetable canning ($1 million increase per year) • Wineries ($1 million increase per year) • Fruit farming ($0.5 million increase per year)

16

For Every Job Generated in Food Processing (Fruit and Wines), More Than 3 Additional Jobs Are Created Employment Impact in Region 8 70

Employment change

60 50

Farm employment

40 Indirect employment

30 20 10

Food processing employment

0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 17

Thank You and Questions