Published: November 28, 2009 11:45 pm      

Labor-force changes cloud local jobs forecast

As the local labor force continues to gray, it poses several questions concerning the future labor supply for local industries in the Johnstown area.

It raises such issues as the increased dependence on an aging work force as a source of workers, skill shortages as older workers face new and unfamiliar technology, and the retention of younger workers entering the labor force in the local area.

An examination of and possible answers to these challenges may lie in an evaluation of population, employment trends, the labor force participation rate for this area, and the emerging trend of older workers opting to continue working.

Other variables may include the success of local efforts to attract and retain more “tech savvy” younger workers who are prepared to meet the immediate needs of area employers, along with some observations of the existing labor force.

The area’s population pattern has not mirrored the labor force.

The population continues to decline and, according to the Penn State Data Center, this trend will continue through 2030. During this 30-year period, an additional loss of 30,315 or 20 percent is projected.

Conversely, between 2000 and 2008 (on an annual average basis) the labor force locally has increased by about 3 percent to 68,900. This movement is very positive, since labor-force growth is one of the major determinants of long-term economic growth.

Labor force participation (percent of working-age population working or actively looking for work) is a key measure of the supply of workers to the economy. It is an important labor-market measure because it represents the relative size of labor resources available.

Generally, the rate increases during economic expansion, when jobs are easier to find, and falls during economic downturns, as individuals leave the labor force altogether in response to relatively fewer job opportunities.

Participation rates vary by age group and gender. Labor participation is generally lower among younger workers and highest among the 25-to-54 age group, which has strong attachment to the work force.

The labor-force participation rate for all workers in the Johnstown MSA is 57.4, the lowest in the six-county region.

Statewide, the rate is 63.7.

The comparatively lower rate locally can largely be traced to a number of factors that include changes in the age composition of the population, the perception of the absence of suitable employment, weakened economy, mismatch of skill levels needed versus employer needs, wage structure and outmigration of workers.

Probably the most dynamic development is the return and retention of older workers (55 and over), a trend of particular significance to the Johns-town area. However, participation rates for older individuals have been increasing over time.

Numerous reasons can be cited for working beyond retirement age and/or returning to the job market. For example, the high cost of health insurance and the decline in employer retiree health benefits, increased life expectancy, lower rates of traditional defined benefit pension coverage and a desire to accumulate more Social Security or other retirement savings wealth are just a few reasons.

None of the counties in Pennsylvania had 20 percent or more of the total work force that was 55 and older. That figure for the Johnstown MSA was 18.6; statewide, 16 percent of the workers fell within that age group.

By 2020 the share of the national labor force held by those 55 and older is projected to be nearly 24 percent. No projections are available for the Johnstown MSA.

The aging of both the population and the labor force may slow the growth rate of the labor force.

The ongoing shift in the local job pattern toward the need for a work force with higher levels of education and technical skills will continue to present a challenge. This trend is seen across both the state and nation.

It is encouraging to see that specific steps are being taken locally through the creation of such organizations as the Young Professionals of the Alleghenies, whose mission is to engage the young people of the area through a common group to better the Johnstown region.

According to James Selapack, these goals are accomplished through social and business networking, and community service. Selapack says that basically the group “is a catalyst to get young people involved in the area.”

The Business and Education consortia has been established to bring industry and education together to identify common needs necessary to improve the skills and performance of new and incumbent workers, thus improving the availability of qualified workers in this labor market.

This skill mismatch of workers continues to create a gap between employers’ needs and potential applicants’ skills.

This report has addressed some of the challenges of the future workplace. Job development and retention of the younger labor force is essential.

Training and providing new employment opportunities will better position this area to take advantage of its diversified industry structure.

Future changes in the work force locally will likely mirror both the state and nation. It will be more diverse and more mobile. Workers will be more highly skilled and readily adaptive to the work place.

Male-female composition will be almost evenly divided, which is close to the present makeup.

With the creation of new employment opportunities accompanied by an overall sustained improvement to the local economy, labor force participation should be on the increase.

Older workers will play a larger role as the aging baby-boom generation remains attached to the labor force.



For 40 years, Bill Findley was employed by the state Department of Labor and Industry Center for Workforce Information and Analysis as a work force information specialist, monitoring and reporting on labor market developments in this area and across the region. He is a graduate of Pitt with a bachelor’s degree in business administration.