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Workforce Challenges and Solutions in the Maine Forest Products Sector Maine Forest Products Council Annual Meeting September 16, 2019 Ryan Wallace Maine Center for Business and Economic Research University of Southern Maine

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Page 1: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Workforce Challenges and Solutions in

the Maine Forest Products Sector

Maine Forest Products Council Annual Meeting

September 16, 2019

Ryan Wallace

Maine Center for Business and Economic Research

University of Southern Maine

Page 2: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Employment growth in the Maine economy has been positive…

but still lags US growth

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Page 3: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Unemployment is at the lowest level on record; labor

force participation has fallen to lowest levels in decades

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Page 4: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Overall labor market conditions are

tight across the state

Source: Maine DOL CWRI, 20184

Page 5: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Flat labor force growth and falling LF participation

are a result of Maine’s current population profile

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Page 6: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Source: U.S. Census Bureau, 2018 Population Estimates

6

Sources: Maine Office of Data, Research, and Vital Statistics; U.S. Census Bureau Population Estimates Program

Page 7: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Natural population growth

was negative for 14 out of

16 Maine counties

between 2010 and 2018.

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Page 8: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Source: U.S. Census Bureau, Population Estimates Program8

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Page 9: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

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Page 10: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

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Sources: U.S. Census Bureau; State Economist population projections

Page 11: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

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Sources: U.S. Census Bureau; State Economist population projections

Page 12: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

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Page 13: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Statewide Summary – Key points

- Population projections show a deficit of 63,000 working age people in 2026 over

2016 levels (*Domestic migration has slightly picked up recently)

- Scenarios will play out differently across the state – rim counties most effected,

urban counties may fair slightly better

- Workforce and labor market conditions will continue to be biggest constraint to

economic growth and competitiveness

- Geographically concentrated industries with specialized skill sets will need to

target recruitment and attraction, both locally and from away

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Page 14: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

The story across the sector is familiar, though recent

developments suggest things are stabilizing, for now…

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Page 15: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

31% of current workforce size either in or will be in retirement age

in next 10 years - needs differ across the sector industries.

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Page 16: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Replacement demands from expected retirements

are significant

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Industry Number Percent Number Percent

Harvesting 944 23% 464 11%

Pulp and Paper 1,617 36% 121 2%

Sawmills and Wood Products 957 19% 201 4%

All 3,519 26% 785 5%

Construction 9,162 21% 2,576 6%

Manufacturing (Net of FP) 10,828 21% 2,159 4%

Transportation and Warehousing 4,228 23% 1,582 9%

Approaching Retirement

Age (55-64)Retirement Age (65+)

Page 17: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Competition between other industries…

and from within

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Page 18: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Relative wages

are key for

recruitment and

attraction

-----Maine avg. $50,752

Annual average wage in Maine & U.S., 2017

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Page 19: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Uncertainty and wage structure are a challenge to supply chain in very tight labor

market – impact on supply access for downstream production

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Page 20: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

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Figure 16: Hourly wages of heavy truck drivers by industry, 2017

Source: US Bureau of Labor Statistics, Occupational Employment by Industry Research Estimates, 2017. Reference data source note on Table 8.

Page 21: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Forest Product Sector Summary – Key points

- Retirement aged workers to exceed 4,000 in next 10 years

- Expansions and restarts call for additional labor demands

- Certainty and predictability important for industry in transition

- Spatial mismatch of displaced labor?

- Wages are a challenge to recruitment, especially supply chain industries

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Page 22: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Solutions to build pipeline?

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Page 23: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Cultivating local

pipeline focused

on youth and early

career, as well as

discouraged

workers.

23Sources: U.S. Census Bureau; State Economist population projections

Page 24: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Cultivating internal pipeline includes bringing

displaced workers back into the job market

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21,014

56,043

41,953

30,414

0 50,000 100,000 150,000 200,000 250,000

Less than high school graduate:

High school graduate (includes equivalency):

Some college or associate's degree:

Bachelor's degree or higher:

In labor force: Not in labor force

Page 25: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Ultimately, the Sector needs to consider recruitment from

outside the state, both youth, early career, and transferable

skill sets.

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Page 26: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Messaging and storytelling are critical

- What is the story being told and heard ?

- Who is listening?

- How is the messaging being delivered?

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Page 27: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

What is the role of the workforce

development ecosystem?

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Page 28: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Let’s see what the panel says…

Jason Brochu – Pleasant River Lumber

Randy Chicoine – Nine Dragons Paper

Jim Contino – Verso

Nancy Lovell – Hardwood Products

Justin Merrill – Merrill Logging

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Page 29: Workforce Challenges and Solutions in the Maine Forest ...€¦ · - Workforce and labor market conditions will continue to be biggest constraint to economic growth and competitiveness

Thank you

Contact info:

Ryan Wallace

University of Southern Maine

p. 207.780.5859

e. [email protected]