In the prosperous Houston economy, a blend of industries is driving new job opportunities for middle-skill workers. But, as EMSI helped identify in a recent report with JPMorgan Chase, two sectors stand above the rest: petrochemical manufacturing and commercial and industrial construction.
The two blue-collar industries are projected to account for a quarter of the 74,000 middle-skill job openings in Houston every year through 2017. In the petrochemical sector alone, Houston is expected to add 120 facilities over the next few years, representing an estimated $80 billion in investments, according to TIP Strategies, an EMSI client whose study on Houston was cited in the JPMorgan Chase report.
Commercial and industrial construction and petrochemical manufacturing are the focus of the “Preparing Houston to Skill Up” report, which was released as part of Chase’s New Skills at Work initiative. The research was unveiled last month at the Greater Houston Partnership’s UpSkill Houston Workforce Summit, an event where business, education, and community leaders gathered to discuss middle-skills workforce challenges and solutions for Houston. Chase published a similar report on New York City in October—one of nine analyses that involve in-depth data analysis from EMSI.
As documented in the latest report, there are 1.4 million middle-skill jobs in the Houston metro, which accounts for 41% of the metro’s labor market. In addition to the 74,000 projected annual openings, looming retirements in middle-skill occupations (more than 20% of workers are 55 years and older) will increase the number of openings.
How strong is Houston’s job market? Since 2009, the metro has grown 10% and created 5% of all net new jobs in the US. Through 2017, Houston’s annual job growth is projected to be 2.3%, well ahead of the expected national rate of 0.8%.
While this is all great news, the metro’s fast-growing economy also poses new challenges. Despite the thousands of unemployed and underemployed Houston residents, the increased demand for qualified workers makes it even more difficult for employers to fill certain middle-skill positions, which require more than a high school diploma, less than a bachelor’s degree, and oftentimes industry-specific training or experience. This disparity between job seeker skills and business needs—the well-known skills gap—is a serious concern in Houston. In fact, in EMSI’s initial skills gap briefing for the New Skills at Work initiative, we noted that Houston has one of the biggest projected shortfalls of mid-skill workers (second only to Washington, D.C.).
In the petrochemical and industrial industries in particular, the current talent supply is not sufficient to meet the demand for middle-skill workers, and relying on imported workers would be both expensive and impractical. The report recommends that Houston “grow their own” workforce by increasing the skills of its underutilized talent, especially the unemployed and underemployed, low-skill youth and adults, and Houston’s growing communities of color.
In order to meet business needs and support the training of these workers, the report lists several recommendations for developing a career pathways system that leads to occupational credentials with high demand in the labor market:
- Expand the number of career pathways that include work-based learning and lead to credentials employers seek.
- Prioritize the highest-demand middle-skill occupations in each industry.
- Provide comprehensive support services (e.g., career advising, basic literacy instruction, transportation, child care assistance) to help students persist in completing programs and earning credentials.
- Target program investments through regional funding collaboratives and other strategies to ensure mutual benefit for employers and workers.
- Expand the size of the talent pool by developing targeted outreach strategies to engage women, people of color, returning veterans, and the long-term unemployed.
- Use data to ensure accountability for short-term and long-term results.
While these recommendations are collaborative, they are primarily intended for employers, community colleges, high schools, community-based organizations, private and public funders, and UpSkill Houston.
If Houston focuses on these middle-skill jobs and dedicates resources to training for them, it will continue to see an increase in employment growth above the national average.
Middle-skill workers earn family-sustaining wages while positively impacting local economies. With the JPMorgan Chase initiative, Houston has a key tool that will help the metro “grow its own” workforce for key industries and occupations while also allowing its workers to grow great careers.