ECONOMIC BACKDROP

• The New York State economy experienced a dramatic turnaround over the past five years. Both civilian labor force and non-farm employment grew from 1995 to 2000 after undergoing sharp declines in the early 1990s. As this transformation occurred, the State's labor market changed from one characterized by job shortages to one marked by labor shortages.

• New York's rate of private sector job growth has surpassed the nation's job growth rate since 1998. The New York State Division of the Budget forecasts that New York State's private sector job growth rate will continue to surpass the nation in 2001. While job growth in New York State will slow in 2001, diminished job growth will not alone significantly reduce the shortages of high-tech workers, nurses, and some teaching specialities in New York State. In short, a slowing economy will not by itself solve the persistent worker shortage problems in these occupations.

DEMOGRAPHIC BACKDROP

• Demographics help us to better understand the past, present, and future composition of New York's workforce.

The Generations

• Born between 1946 and 1964, the Boomers constitute a huge demographic bulge. In New York State, Boomers make up 44 percent of the working-age population.

• Following the Baby Boom, New York experienced a decline in births. Hence, this group is known as the Baby Bust generation (1965 to 1979). About 32 percent of the working-age population are members of this generation.

• The next generation is referred to as the Baby Boom Echo, the children of the Boomers. Because couples were having fewer children, this generation was a small boom. Born between 1980 and 1995. About 8 percent of the working-age population are members of this generation.

• An emerging group, the Millennium Busters, born after 1995, is the generation following the echo, and is estimated to be a much smaller group than the Echo generation.

• Finally, the pre-Boomers, persons born before 1946, comprise one-fourth of the State's population and one sixth of the State's working-age population.

Generation	Born	Age in 2001	Number in 1999	Percent of State's Working Age Population (16-64) in 1999
Millennium busters	1996 – present	0 to 5	962,773	0.0
Baby Boom Echo	1980 – 1995	6 to 21	3,962,072	8.1
Baby Bust	1965 to 1979	22 to 36	3,756,870	31.8
Boomers	1946 to 1964	37 to 55	5,253,458	44.5
Pre Boomers	Pre-1946	56 and over	4,261,428	15.5

What Happened in the '90s?

• New York's working age population, those aged 16 to 64, declined by almost 36,000, a loss of .3 percent, between July 1, 1990 and July 1, 1999. The 20-24 age group, the traditional source of emerging workers, experienced the most severe decrease. The group's population declined 20.1 percent. In addition, the number of persons in the 25-34 age group fell 16.7 percent.

• The group with the most rapid growth was, by far, the 45-54 group (comprised of the oldest Baby Boomers). It grew 27.5 percent.

• The 34-44 age group, representing the younger half of the Baby Boomers in 1999, also grew, up 10.7 percent over this period.

Migration: The Composition of New York's Population is Changing

• Two large migration streams that have helped to shape New York's workforce over the past decade: net domestic out-migration (net migration from New York to other states) and net international in-migration (net migration to New York from other countries).

• New York State lost an average net of 204,000 residents annually to other states between 1990 and 1999 according to the latest available estimates from the U.S. Census Bureau (age and migration data are not yet available from Census 2000).

• This population loss was only partially mitigated by net international in-migration to New York State, which averaged 120,000 per year over the same period. These migrations represented a continuation of patterns in place in the late 1980s.

Average Net-In Migration From Other Countries - 120,000
Average Net-Out-Migration To Other States - -204,000

• Initial results from the 2000 Census suggest the net international in-immigration was considerably larger than first thought.

A Look Ahead

• Some aspects of worker shortages can be better understood by knowledge of demographic trends.

• As Baby Boomers grow older and retire earlier than prior generations, shortages of experienced workers could be exacerbated, especially if the economy continues to expand rapidly. At the same time, shortages of entry-level workers, those with little or no work experience, should ease slightly in the next few years. In fact, the number of persons 16 to 19 years of age in New York has inched up every year since 1994 as a result of the aging of the Baby Boom Echo generation.

• As international immigrants become a more integral part of the New York State economy, courses such as English as a Second Language will be needed as part of employee training programs to help new workers overcome language barriers.

• Utilization of skilled foreign workers, hired under such programs as the H1B program, may expand to help mitigate worker shortages.

• Domestic out-migrants tend to be younger, more highly educated, and to possess job skills desired by employers. In fact, these attributes contribute to their mobility.

BEHAVIORS

The Career Selection Process

• Young people often do not enter the fields that need them most desperately. The following remarks offer an explanation.

• A young person's identity is composed of many things. Not the least of which is their role as a worker. Career Life-span development theory (Super, 1984) suggests that students entering the workforce are in a period of exploration. As such, a series of tentative jobs that allow them to try on a variety of identities is to be expected, before settling on a stable worker role.

• Students who make career choices consistent with their interests and needs report greater satisfaction and retention (Holland, 1985; Lofquist & Dawis, 1969).

• Workers who have explored many roles before committing tend to be more satisfied than those who choose without exploration. It is particularly important that the decision be a reflection of the student's needs and interests not those of others (i.e. parents, counselors, or the environment). Students who do not explore their options generally develop unhappy and unstable career patterns (Super, 1984).

TEACHER SHORTAGES

Demand factors

• Increased school-age population
  The school-aged population (5-17 years of age) in New York State increased 7.6 percent between 1990 and 1999, while overall population growth for all groups was only 1.1 percent. Total school enrollment (public and private) increased 108,000, or 3.4 percent, in New York State from the 1994-95 school year to the 1997-98 school years, according to the latest data available.

• Mandated class size reduction
  Pupil/teacher ratios, which fell from 14.3 to 13.7 in New York State public schools the 1994-95 to school year 1997-98, are declining and new teachers will be needed to reach mandated teacher/pupil ratios. This policy will likely continue to necessitate an expanded teaching work force.

• Large international in-migration
  New York State experienced net international migration of over 1.1 million between 1990 and 1999 (this figure will be revised substantially upward when migration data from Census 2000 are released), dramatically increasing the need for bilingual education teachers, especially in New York City.

• New academic standards
  State mandates have increased performance standards, including graduation requirements, for all students in New York. In 2003, most students will have to pass five Regents exams in order to earn a diploma in New York State.

Supply Factors

• Overview
  According to published reports, there will be a shortage of 100,000 teachers during the next five years. Compensation for teachers has been viewed by many as the prime reason for not attracting quality teachers. Although the average salary for all teachers in 1998-99 was almost $51,000, students considering teaching as a career often find that it pays less than other professions requiring similar levels of education. Those who consider a career in teaching must weigh intrinsic rewards and other benefits such as summer vacations against salary limits and working conditions. (Wage data from New York State Department of Education website, "Teacher Supply and Demand Data for 1998-99 by New York State Region")

• Degrees Conferred
  New York State colleges and universities provide a degree in education. About 8 percent of bachelor's degrees conferred were in education, making it the third most popular field of study in New York State. Education is by far the most popular field at the master's level, accounting for 29 percent of degrees conferred.

• Aging workforce
  New York's teaching workforce is aging along with the general population. Statewide, 46 percent of teachers are 45 years of age or older, while 13 percent are over 55. In addition, about 38 percent of New York's current teachers will have retired or reached age 55 in the next five years and are potential retirees. (Data from New York State Department of Education (NYSDoE) website, "Teacher Supply and Demand Data for 1998-99 by New York State Region")

• Many retirements
  The New York State Teachers' Retirement System received more than 8,350 applications from 1999 and 2000, the largest number in 10 years. (New York Teacher, publication of the New York State United Teachers, November 8, 2000)

• Fewer college students interested
  A national study found that the proportion of female college freshmen indicating primary school teacher as a probable career dropped from about 20 percent in the late 1960s to less than 10 percent in the mid- and late-1990s. Over the same period, the proportion indicating secondary school teacher declined from 18 percent to 4 percent. (Cited in Staiger, Auerbach, and Buerhaus, Nursing Economic$, Sept-Oct 2000)

• More teacher candidates failing certification exams
  As students face higher standards in the classroom during the last three years, more teachers and prospective teachers are failing state certification tests in all major subject areas. In the 1999-2000 school year, 37 percent failed the math teacher certification test compared with 32 percent that failed in 1997-98. One in four failed the teacher's English test in the 1999-2000 school year -- more than double the rate in 1997-98. (Michael Gormley, "Teachers Stumble over Tougher Tests," Times Union, April 6, 2001)

• A 1998 bill increased the H-1B visa quota to 115,000 for 3 years to try to alleviate the strain on businesses caused by the shortage of qualified workers. For the last 6 months of 2000, 25 percent of the over 2,700 petitions filed in New York State were for positions (mostly post-secondary positions) in education.

Significant problems are where and what

• The significant aspect of this problem is not total number of teachers, but the distribution of teachers. The need for teachers depends on where they want to teach and what field they teach.

• Urban areas are often hit hard by teacher shortages. Suburban districts with higher property tax bases can pay higher salaries and offer better work environments with smaller classes. For example, a recent teacher recruitment convention at the College of Saint Rose in Albany, there were long lines of teacher hopefuls at tables for suburban schools, but rural and urban districts were often ignored. ("Day's Lesson: Supply vs. Demand," Times Union, March 27, 2001)

Where issues: Challenges facing New York's urban areas

• Teacher certification and recruitment
  Recruitment of certified teachers in New York State is more difficult in urban areas, where teachers are more likely to lack certification, to have failed certification exams and to have attended less competitive colleges. (Lankford, Wyckoff and Papa, "The Labor Market for Public School Teachers: Descriptive Analysis of New York State's Teacher Workforce," October 25, 2000)

• Teacher turnover
  According to the same University of Albany study, first-time teachers in New York City are more likely to leave the city public school system than are teachers from other areas. In addition, they are also far less likely to then become teachers again than teachers in any other New York State public school. (Lankford, Wyckoff and Papa, "The Labor Market for Public School Teachers: Descriptive Analysis of New York State's Teacher Workforce," October 25, 2000)

• Temporary licensees
  Use of any temporary licensees indicates a teacher shortage. When this figure rises to 10 percent or more of employed teachers, then the situation needs to be reviewed according to the State Department of Education. Statewide, temporary licensees accounted for 7.0 percent of all teachers, but in New York City the comparable percent was much worse (15.6 percent). Other regions in the State ranged between 1.1 percent and 6.5 percent. (Data from New York State Department of Education (NYSDoE) website, "Teacher Supply and Demand Data for 1998-99 by New York State Region")

• Teachers over 55 years of age
  In New York City, 15.7 percent of teachers were over 55 years old, the highest of any region in the State (statewide average is 13.0 percent). (Data from New York State Department of Education (NYSDoE) website, "Teacher Supply and Demand Data for 1998-99 by New York State Region")

What issues: Shortage varies significantly by teaching fields

• Shortage fields, defined here as where temporary licensees account for 10 percent or more of employed teachers include:

Examples of surplus fields:

Proposed Remedies

A variety of initiatives have been attempted around the nation to increase the quantity and quality of teachers (Lankford, Wyckoff and Papa, "The Labor Market for Public School Teachers: Descriptive Analysis of New York State's Teacher Workforce," October 25, 2000). Among these:

• Massachusetts adopted the first statewide “signing bonus” policy. Other states, including New York, have adopted similar policies.

• California recently enacted a tax credit of up to 50 percent of the tax that would otherwise be imposed on a teacher's salary.

• Many states have adopted loan forgiveness programs and offered tuition credits.

• At least 29 states and many localities provide bonuses and incentives for certification by the National Board of Professional Teaching Standards.

• The U.S. Department of Housing and Urban Development has implemented the Teacher Next Door Program, which allows teachers to purchase HUD-owned homes in their school districts for a 50 percent discount.

Health Care Shortage
Demand for nurses will continue to grow as supply continues to contract

Demand Factors

• Shift in where nurses work.
  The shift to managed care systems caused a shift in staffing patterns and the utilization of nurses in health care facilities. Nursing employment has been decreasing at hospitals and simultaneously it has been increasing in home health, nursing homes, ambulatory care facilities, and physician offices.

  The percentage of registered nurses in the nation employed in a hospital setting declined from 66.5 percent in 1992 to 59.1 percent in 2000. This decline has been accompanied by a decrease in hospital discharges for inpatient stays from 110.5 per 1,000 population in 1992 to 103.0 in 1998, and a decrease in average length of stay from 6.0 to 4.9 days over the same period.

• Concurrent with the decline in hospital utilization has been a dramatic increase in the home health care population, which doubled in the nation from 1.2 million in 1992 to 2.4 million in 1996. Between 1985 and 1997, the number of nursing home residents 65 years and over was up only 11 percent, to 1.47 million, because of strong growth in home health care.

• Between 1990 and 1999, in New York State, total hospital employment declined 5.5 percent. In sharp contrast, employment at nursing-intensive non-hospital settings, especially those providing post-acute care, increased dramatically over the same period. Employment at physician offices rose 47.4 percent; nursing facilities, 30.6 percent; and, home health agencies, 33.9 percent.

• Aging population in New York State
  New York's 65 and over population grew 12.4 percent between 1980 and 1999 while overall growth for all groups was only 3.6 percent. The population 80 and over, the most likely to utilize nursing home services, grew 42.0 percent over this period (U.S. Census Bureau estimates).

  The graying of the baby boomer generation will increase demand for health care services now and in the future. It is estimated that the population aged 55 and over in New York State will increase 33.0 percent by 2020, when the youngest baby boomers will have passed their 55th birthday (U.S. Census Bureau projections).

• Less-skilled health care occupations in the assisted living field include nursing aides and orderlies and home health aides. These occupations also suffer from worker shortages, due in large part, to relatively high turnover rates. Wages and working conditions associated with these occupations often prompt workers to seek employment alternatives.

Supply Factors

• The nursing workforce is aging along with the general population. The average age of registered nurses in New York is 48, the average retirement age is 52 and only 10 percent of working RNs are under the age of 30. (Healthcare Association of New York State fact sheet)

• A recent study by Vanderbilt University found that the number of full-time RNs in the nation was projected to peak around 2007 and then decline steadily as more nurses retires along with the baby boomers ("Some Worry Nursing Shortage Could Put Patients at Risk," cnn.com, January 12, 2001).

• Individuals are not entering the nursing workforce. A national study found that women graduating from high school in the late 1980s and 1990s were 30 percent to 40 percent less likely to become registered nurses compared to those graduating in the 1960s and 1970s. (Staiger, Auerbach, and Buerhaus, Nursing Economic$, Sept-Oct 2000)

• New York State had an 11 percent decline in baccalaureate nursing degrees and a 32 percent decrease in associate nursing degrees during the past 5 years (Center for Health Workforce Studies, University of Albany School of Public Health). Over the past three years, there was a 31.3 percent decline in first time RNs sitting for the New York nursing license exam and a 45.6 percent decline in first time LPNs sitting (newsletter of the New York State Nurses Association, December 2000).

• Nursing shortages are most widely experienced in highly specialized settings including critical care units, operating rooms, labor and delivery, and emergency positions (Staiger, Auerbach, and Buerhaus, Nursing Economic$, May-June 2000).

• "The most prominent factor [in explaining women's declining interest in nursing as a career] seems to be the concurrent expansion of opportunities for capable young women to enter formerly male-dominated professions such as medicine, law and business." (Staiger, Auerbach, and Buerhaus, Nursing Economic$, Sept-Oct 2000)

• The strong state and national economies have meant that higher paying, lower stress jobs with better hours are more widely available. Consequently, nursing has become a less attractive option to many.

• Health Care Financing Administration predicts that the national demand for nursing to far outpace supply through 2020 when the RN shortage is projected to reach 500,000 positions ("Some Worry Nursing Shortage Could Put Patients at Risk," cnn.com, January 12, 2001).

• An extremely tight labor market has exacerbated the high turnover rate among direct care workers. Workers with at least a high school education can easily find employment in many other types of service jobs, retail work, or unskilled labor jobs. For many, long-term care is seen as an unattractive field due to its physically and emotionally demanding work, long hours, and relatively low wages.

Impacts of Shortages

• Decreased quality of care
  A survey released in February 2001 by the American Nursing Association revealed that 75 percent of nurses believed that a nursing shortage and increased nurse dissatisfaction is compromising the quality of care. About 40 percent said they would not feel confident having someone close to them receive care at their facility.

• Decreased profitability for hospitals
  New York hospitals lost $539 million in 1999 and $149 million in 1998. In addition, New York ranked 49th in the nation in profit margins due in part to increased wages (Hospital Association of New York State). Wages account for approximately 20 percent of operating expenses. ("Health Care Advocates Highlight Hospital Woes," Times Union, March 7, 2001; Rakesh Shankar, "Labor Pains in Health Care," dismal.com, February 15, 2001).

• Increased health care prices to consumers and higher insurance premiums for employers as health care facilities attempt to pass on some of their rising costs stemming from worker salary hikes.

Proposed Remedies

• Better salary and working conditions
  Signing bonuses, increased salaries and more flexible hours have all been utilized to attract and retain nurses. Most of these measures, however, tend to drive up the cost of medical care.
  

• Travelling nurses
  Hospitals contract with companies that employ nurses who work three- to-six month shifts at understaffed hospitals.

• Federal legislation
  The Nursing Relief for Disadvantaged Areas Act of 1999 was introduced to allow up to 500 nurses per year over a four-year period to enter the United States under new, non-immigrant H-1C visas, to work in inner-city and rural hospitals that are heavily Medicare and Medicaid-dependent.

• Greater use of technology
  Restructuring health care occupations to permit greater use of automation and information technologies can free up the time of health care workers, particularly nurses, so that they spend more time providing care and less time pushing paper.

High-Tech Worker Shortage

Demand Factors

• The need for high-tech workers is a function of the nation's strong economic vitality and growth. In addition, technology is pervasive in the work place and is used extensively in a wide range of occupations.

• Some definitions of high-tech workers include support workers but others focus only on the professional occupations. In short, the line between high-tech and non-high-tech workers is not clearly drawn; discussion about the shortage problem can be clouded by the lack of a consistent definition.

• Some workers in low-tech industries are high-tech workers and some workers in high-tech industries are low-tech workers.

• The increased use of technology in the means of production and delivery of goods and services has stimulated the demand for high-tech workers. Despite a slowing economy and changing market conditions, employers are still struggling with a shortage of qualified IT workers. Of the approximately 900,000 IT positions businesses hope to fill this year nationally, 425,000 will go unfilled. The majority of these positions are in non-IT companies (Information Technology Association of America, 2001).

• In New York State, we project that for the next few years employers will fill on average over 49,000 openings annually for high-tech workers. This projection includes job openings that may arise for any reasons including promotions and switching from one occupation to another.

• Retirements and economic growth alone will generate the need for over 18,000 new high-tech workers each year. This latter number is indicative of how many new workers are needed in the field each year.

• Specialized computer scientists, computer engineers, and computer support specialists are growing at the fastest rate (114 percent, 98 percent, and 84 percent, respectively). The most high-tech job openings will arise for systems analyst, computer support specialist, and computer programmer occupations.

Supply Factors

• When firms upgrade their technology to increase productivity and efficiency, they need to upgrade the skills of their employees. Many smaller firms, however, lack the economies of scale of the larger organizations and find the expense of training to be prohibitive (American Express, 2000).

• Only 3 percent of the degrees conferred in New York were in computer science.

• Colleges and universities have not been able to keep up with changes the fast-paced technology field because equipment is very expensive to buy, upgrade and maintain.

• Critics note that secondary schools are not preparing students adequately for the high-tech world; they too are hindered by the high cost of computer equipment.

• For the last 6 months of 2000, 35 percent of the H-1B visa petitions filed in New York State were for computer-related, architectural/engineering, or math/science occupations. These would fill only two percent of the projected total openings for the year.

Proposed Remedies

• Engage students of all ages to math, the sciences, and computer science and the wide variety of occupations that require an education in these fields.

• Partnerships and alliances between employers, schools, and training providers would facilitate training, exposure, and help alleviate the shortage of qualified workers.

• The skills of many high-tech workers can become out of date rapidly in the fast-paced, high-tech arena. The Governor of New York, recognizing the need to have a ready supply of high-tech workers, authorized $10M to be awarded by the New York State Department of Labor for training of current and newly hired workers in needed high-tech occupations in high-tech and non high-tech businesses.

High-Tech Occupations Chart