Barry BluestoneNortheastern University

CEOs for CitiesBoston, Massachusetts

October 17, 2012

Massachusetts Manufacturing Employment (in thousands) January 2007–December

2009

Source: U.S. Bureau of Labor Statistics

Jan-07

Feb-0

7

Mar

-07

Apr-0

7

May

-07

Jun-07

Jul-0

7

Aug-0

7

Sep-0

7

Oct

-07

Nov

-07

Dec-0

7

Jan-08

Feb-0

8

Mar

-08

Apr-0

8

May

-08

Jun-08

Jul-0

8

Aug-0

8

Sep-0

8

Oct

-08

Nov

-08

Dec-0

8

Jan-09

Feb-0

9

Mar

-09

Apr-0

9

May

-09

Jun-09

Jul-0

9

Aug-0

9

Sep-0

9

Oct

-09

Nov

-09

Dec-0

9220

230

240

250

260

270

280

290

300

310

298.2

291.6289.2

252.7

-36,500 jobs

Massachusetts Manufacturing Employment (in thousands, seasonally adjusted)

January 2008-June 2012

Source: U.S. Bureau of Labor Statistics

Jan-08

Mar

-08

May

-08

Jul-0

8

Sep-0

8

Nov

-08

Jan-09

Mar

-09

May

-09

Jul-0

9

Sep-0

9

Nov

-09

Jan-10

Mar

-10

May

-10

Jul-1

0

Sep-1

0

Nov

-10

Jan-11

Mar

-11

May

-11

Jul-1

1

Sep-1

1

Nov

-11

Jan-12

Mar

-12

May

-12

220

230

240

250

260

270

280

290

300

290.8

252.7250.4

Stable employment since November 2009 … despite Great Recession

U.S. Manufacturing Employment

• January 2010: 11,458,000• September 2012: 11,942,000

Gain +484,000 jobs

Massachusetts Employment by Sector (in thousands) June 2012

Source: Massachusetts Executive Officer of Labor and Workforce Development, Current Employment Statistics (CES 790 Series), July 2012.

Real Estate and Rental & Leasing

Arts, Entertainment, and Recreation

Federal Government

Management of Companies and Enterprises

Transportation, Warehousing, & Utilities

Information Services

Construction

Other Services

State Government

Wholesale Trade

Education Services

Finance & Insurance

Administration & Support Services

Manufacturing

Local Government

Accommodation and Food Services

Professional, Scientific and Technical Servicess

Retail Trade

Health Care & Social Assistance

0 100 200 300 400 500 600

38.2

42.6

46.7

58.4

85.9

85.9

102.2

121.4

123.5

125.1

158.2

165.8

172.1

250.4

260.4

267.6

269.3

350.6

514.9

Change in the Number of Massachusetts Manufacturing Establishments (2002-2011)

Source: Massachusetts Department of Labor and Workforce Development, ES-202 Employment and Wage Statistics

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-600

-500

-400

-300

-200

-100

0

100

-326

-188 -197

-524

-267

-169-150

-244

-81

43

Manufacturing Share of Private Industry Output (% of GSP) (1997-

2011)

Source: U.S. Bureau of Economic Analysis

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%15.0%

14.5%14.1% 14.2%

12.1% 12.1% 12.2%

11.3% 11.1% 11.2% 11.1% 10.8% 10.8%

12.0% 12.2%

Productivity in MassachusettsAll Industries vs. Manufacturing

Productivity1997-2007Annual GrowthRate

2007-2011Annual GrowthRate

GSP/Worker – Private Sector +2.3% +1.7%

GSP/Worker - Manufacturing +9.7% +8.7%

Source: U.S. Bureau of Economic Analysis (Updated June 5, 2012 with revised estimates for 1997-2010) (Gross State Product (GSP) is in $millions of chained (real) 2005 dollars)

Average Annual Salaries for Massachusetts Industry Sectors

(2010)

Source: US Bureau of Labor Statistics, Quarterly Census of Employment and Wages, Employment and Wages, Annual Wages, 2010, table 8 & 10, http://www.bls.gov/cew/cewbultn10.htm#Tables

Finance

Professional Technical Services

Information

MANUFACTURING

Real Estate

Government

Healthcare

Agriculture, Forestry, Fishing

Arts

Other Services

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000

$115,403$104,257

$101,201

$104,003

$92,110

$79,268

$75,202

$62,133

$60,116$57,673

$56,277$56,263

$51,570

$41,648

$47,389

$38,466

$34,519

$27,772

$27,529

$19,338

Share of Massachusetts Payroll (2011:3rd Quarter)

Top 4 Sectors

Employment Sector

Total Employment

Percent of Massachusetts Workforce

Percent of Massachusetts Total Payroll

Health Care 532,934 16.6% 15.3%

Retail Trade 344,751 10.8% 5.3%

Education 282,818 8.8% 8.7%

Manufacturing 254,300 8.0% 10.1%

Source: Massachusetts Office of Labor and Workforce Development, Employment and Wages http://lmi2.detma.org/lmi/lmi_es_asp#IND_LOCATION

Massachusetts Manufacturing A Diverse Workforce

  2005 2010

Source: 2010 American Community Survey

[i] Hispanic includes Hispanics that are foreign-born and native. The same with Asians and African-Americans.

EthnicityShare of Non-Manufacturing Workforce

Share of Manufacturing Workforce

Share of Non-Manufacturing Workforce

Share of Manufacturing Workforce

Foreign Born 15.9% 24.4% 18.3% 26.0%

Hispanic 5.8% 8.3% 7.3% 9.3%

Asian 4.1% 6.5% 5.0% 8.9%

African-American

4.9% 3.8% 5.8% 3.4%

Proportion of Workforce Age 45 or Older

2000 2006 20100.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

40.5%

49.6%

53.9%

36.1%

41.4%

44.6%

Manufacturing All other industries

Source: American Community Survey, Public Use Files, 2006, 2010, Tabulations by Center for Labor Market Studies and Dukakis Center for Urban and Regional Policy, Northeastern University

Job Openings

• Given retirements and normal employee turnover, Massachusetts manufacturers will need to find 100,000 new workers over the next ten years to replace current workforce

Expected Production Levels of Massachusetts Manufacturing Firms over the Next Five Years (2012

- 2017)

Source: Dukakis Center Manufacturing Survey, 2012

Continued production at increased lev-

els; 65.4%

Continued produc-tion at current levels; 24.4%

Continued produc-tion but at reduced

levels; 7.7%

Cessation of production in Massachusetts; 2.5%

5 Year Employment Projections of Massachusetts Manufacturing Firms (2012 –

2017)

Source: Dukakis Center Manufacturing Survey, 2012

Expansion of Massa-chusetts Employment

by >25%13%

Expansion of Massachu-setts Employment by 11-

25%22%

Expansion of Massachusetts Employment by 1-10%

35%

Maintenance of Current Employment Levels

23%

Reduction of Massachusetts Employment by 1-10%

4%

Reduction of Massachusetts Employment by 11-25%

1%

Reduction of Massachusetts Employment by >25%

2%

Firms increasing Employment:70%

Recommendations for Promoting Manufacturing in Massachusetts

Source: Dukakis Center Manufacturing Survey, 2012

RecommendationVery Important

or Extremely Important

Working with School or Community College Instructors to Incorporate Industry Standards into Curriculum

30.3%

Creating a certificate in manufacturing technology 27.5%

Serving as mentors/advisors at selected vocational schools or community colleges

27.4%

Speaking to Parent Organizations/Student Groups About Careers in Manufacturing

24.7%

Contributing Machinery, Tools, or Other Materials to Schools

21.0%

Exhibiting at Education, Career, and Technology Fairs 19.7%

Instituting company-sponsored educational scholarships 14.2%

Hiring vocational/community college teachers to train your employees

11.6%

Conclusions

• Manufacturing is alive and well in the Commonwealth and has a healthy future

• Closer cooperation between training institutions and manufacturing can fulfill the sector’s need to replace an aging workforce

• Continuing to promote the industry will help secure the Commonwealth’s prosperity for years to come

• Older Industrial Cities will benefit the most