Contact: Laura Holden
Three Rivers Workforce Investment Board
412.552.7089

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Managing the Changing Workforce in Southwestern Pennsylvania:
A closer look at issues related to our region’s aging workforce

Pittsburgh, PA (June 6, 2006) – According to initial study results (April 2006), the region is not homogenous in terms of the demographic composition of the workforce. Newly-released industry-focused analysis included in this study (now available on the Three Rivers Workforce Investment Board website: www.trwib.org), suggest that just having an older workforce doesn’t necessarily spell workforce problems for an industry. While study findings reinforce some of the recurring concerns about shifting regional demographics, they also illuminate the types of potential shortages and point to opportunities for regional growth for several industries that have workforces among the oldest in the region.

In partnership with Carnegie Mellon University’s Center for Economic Development, the Three Rivers Workforce Investment Board has conducted a study of the industries most impacted by the aging demographics of our region. This research, partially funded by the Heinz Endowments through the Regional Workforce Collaborative of Southwestern Pennsylvania, utilizes several sources. Study reports that focus on six industries identified in this research as being among the oldest workforces in the region have been released (In-depth Industry Profiles) and are described herein.

This study, including the newly-released industry profiles, suggests that the region will be in a better position to uncover and learn from approaches taken by some companies to deal with potential workforce shortages. Since the study is not meant to sit on a shelf (or web site), audience members including, employers, policymakers, educators, funders, workforce development professionals and concerned citizens, can better frame the issue, identify where intervention and drill down tactics are needed, and in short, guide strategic workforce planning for the region.

According to Ron Painter, CEO of the Three Rivers Workforce Investment Board, “Study findings offer a “win” in regional strategic workforce planning by better defining the issue and importantly by helping the region anticipate the industries and occupations that will be most impacted. Results of studies are generally good news/bad news. In this case, we think that the results point to excellent opportunities for young people to enter Pittsburgh’s labor market. In addition, this study shows exciting examples of collaboration among corporations and community colleges. The end results of these partnerships are that the region builds the necessary training to replace and augment older workers and a strong competitive workforce while positioning the region for economic growth.”

Key analytical findings outlined below center on industries with the oldest workforces in our
region.

Mining

Some industries such as Mining face potential workforce shortages, but they also can benefit from strategic resources to replenish the workforce supply. Heightened demand for coal is expected to continue in the near term. Civil mechanical engineers along with miners with particular state certifications may be among the first types of positions likely to be in short supply. The current industry situation is characterized by: a steep decline in miners owing to increases in productivity and changes in the number and types of mines. As important are changes in the use of technology, miner educational levels, and the shared and growing knowledge about laws and regulations held by companies, regulators, and miners.

The study also identified some future workforce development support. Targeting the energy industry, including coal mining for workforce development, the federal Employment and Training Administration’s High Growth Job Training Initiative (HGJTI) has provided HGJTI grants ($3.5 million) to two local educational institutions - West Virginia University and Penn State’s Fayette campus - to develop training for the industry. Also participating in this key workforce development initiative are several regional employers.

Petroleum and Coal Products Manufacturing (P&C)

Though not as dramatic as Mining, the Petroleum and Coal Products Manufacturing subsector also has one of the oldest though comparatively small workforces in the region. The industry experienced net job losses from 2001-2004, but it averaged about 140 new hires in 2004. Hires pull from recalled and new employees. No specific occupations in this industry emerged as workforce development opportunities; nor did any workforce development initiatives directed at this industry come to light based on this study’s findings. Responses to the employer survey were mixed; there wasn’t a consistent pattern in identifying a problem with replacing retiring workers.

Primary Metals Manufacturing

This industry sub-sector while not as dominant in the region as it once was continues to play a strong role in the region’s economy. Assessing the workforce outlook for this sub-sector proved difficult in this research; few large firms that focus on the production of basic steel responded to the Changing Workforce Survey. Large local firms are less likely than some smaller counterparts to face problems replacing retiring workers. Several local initiatives offer specialized apprenticeships and training programs.

Utilities

The utilities industry is facing a workforce challenge nationally; in the region, particularly electric and to a lesser extent natural gas utilities are among the oldest workforces. By one measure, the industry achieved net job growth from 2001 through 2004 although most of the gains occurred in 2002. The utilities industry hired an average of 760 hires per quarter from 2001 to 2004. Many of these hires were actually recalls of workers previously employed with the same firm. Based on this study, at least two local workforce development initiatives are making headway in addressing the issue: one through Duquesne Light and CCAC (Electrical Distribution Technology program intended to develop electric line workers) and through joint programs between FirstEnergy and Youngstown University in Ohio and Clarion University of Pennsylvania.

Transit and Ground Passenger Transportation

This industry sub-sector has one of the oldest workforces in the region and involves jobs in school bus services with urban transit systems, charter bus services, taxis, limousine services, and others ground transit services. An older workforce in this industry sub-sector does not necessarily pose a problem since some of the work is seasonal; in addition, workers tend to stay on the job for a long time. The industry also benefits from various long standing labor dynamics – generally low turnover and the tendency for workers that have retired from local public transit systems to find part-time work with school, taxis, and charter bus services.

The positions most likely to be relatively difficult to fill involve vehicle maintenance. However, there are opportunities for training and growth. The High Growth Job Training Initiative under the US Dept of Labor Employment and Training Administration has sponsored several federally funded programs that work in tandem with local programs. These will create the standards and systems for apprenticeships, training, and skill certification for five transit maintenance occupations.

Air Transportation

Employment in this industry sub-sector is concentrated in Allegheny County owing to the presence of Pittsburgh International Airport. There were frequent quarterly net job losses from 2001–2004 although an aging workforce has not posed a significant problem. Recent hires involve recalls of workers previously employed by the same firm. Strong compensation packages have historically been offered by the industry. Further, due to economic conditions, there has been an ample supply of workers to replace retirees.

Study results did not identify specific occupations expected to be impacted by retirements.
Relevant training is available from several institutions such as Butler County Community College in aerospace management, air traffic control, and piloting. The Pittsburgh Institute of Aeronautics offers training in aircraft maintenance. The Transportation industry as a whole has been identified by the federal administration as part of the High Growth Job Training Initiative.

Study Implications/Next Steps

Strategic workforce planning involves analysis over time; accordingly, this study suggests the conditions that are static along with the changing market and workforce dynamics in selected industries. The results of this study will help define the problem for the region and inform several constituencies about the workforce situation across industries and within those that are particularly vulnerable to workforce shortages. Various forums intended to address this important issue will be planned throughout the year. The Institute of Politics at the University of Pittsburgh with the Three Rivers Workforce Investment Board will sponsor a forum (by invitation) on June 23, 2006. (For additional information about this event, please call: 412.624.7748.) Employer participation is especially encouraged. The TRWIB encourages employers and others interested in this issue to share their perspective at www.trwib.org.

Research Method - Overview

The Industry Profile analysis of the study, Managing the Changing Workforce in Southwestern Pennsylvania (A Closer Look at Issues related to our Region’s Aging Workforce) consists of reports about several industries identified as having the oldest workforce compositions in our region and uses several sources. The analysis is based on U.S. Census Local Employment dynamics data, employer surveys, and secondary research to understand employment trends in these industries.

Study Partners

The Three Rivers Workforce Investment Board

The Three Rivers Workforce Investment Board (TRWIB) is an employer-driven, policy-making entity for Pittsburgh and Allegheny County. Board members, appointed by the Mayor of Pittsburgh and the County Chief Executive, share a concern about workforce quality and the availability of good jobs in the region. The 1998 federal legislation that consolidated employment and training programs, The Workforce Investment Act, also created local workforce investment boards, including the TRWIB.

Center for Economic Development

The CED is affiliated with the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University. Established in 1968 and renamed in 1992 in honor of the late U.S. Senator from Pennsylvania, the Heinz School improves the ability of the public, private and nonprofit sectors to address important problems and issues facing society.

Note: This research was partially funded by the Heinz Endowments through the Regional Workforce Collaborative of Southwestern Pennsylvania.