Healthcare holds large share in U.S., Arkansas job market growth projections

Service-related careers, especially in healthcare, show the most promise for growth nationwide and in Arkansas during the next few years, according to data from the U.S. Department of Labor and the Arkansas Department of Workforce Services.

More than 90% of the estimated 11.5 million non-farming jobs projected to be added between 2016 and 2026 will be in that sector, according to a recent Career Outlook from the Labor Department’s Bureau of Labor Statistics.

In Arkansas, services-providing industries are projected to make up 109,870 of the state’s 130,085 new jobs added between 2014 and 2024, the latest available outlook data from the Department of Workforce Services.

“There has been an ongoing transformation in the economy as to where the jobs are,” said Michael Pakko, chief economist at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock. Nationwide and in Arkansas, the paradigm has shifted from a focus on goods production to a focus on services.

Arkansas has seen significant growth in professional and business services, which covers a wide range of jobs, from attorneys to temp workers, Pakko said. He attributed this in part to a movement from companies that once handled things like accounting services in-house now contracting out that work.

Professional and business services industries are expected to add 15,106 jobs in Arkansas between 2014 and 2024, according to DWS.

The biggest growth in the services realm statewide and also nationwide during the next few years could be in the healthcare and social assistance sector, which is projected to add close to 4 million jobs between 2016 and 2026, according to BLS. More than half of the new jobs will be in the outpatient healthcare services category, and home healthcare service jobs are projected to show the most significant growth, increasing by 54%.

In Arkansas, healthcare and social assistance is projected see the largest growth among industry sectors, with 30,583 jobs expected to be added between 2014 and 2024, the latest available data from the Department of Workforce Services. Of those jobs, 14,186 fall under the category of outpatient medical care services. Healthcare reform and other factors play into growth in healthcare fields, but an aging population is the main cause, Pakko said.

“The growth in healthcare employment is phenomenal. … A primary driver is the Baby Boomer population is getting into an advanced age range where more health services are required,” Pakko said. “It’s a growth sector because of growing demand.”

Some industries with fast rates of growth have a relatively small number of workers. However, in Arkansas, nine education and health services industries were projected between 2014 and 2024 to be in the top 20 fastest-growing industries list, and nine made the top 20 list in terms of net growth, according to DWS.

Restaurants were projected to show the most net growth in the 10-year period, adding 17,361 jobs to employ 99,638 in 2024, marking 21% growth.

“We talk a lot about high-tech skills, but, when it comes right down to it, there is always a lot of hiring for low-skill, high-turnover jobs like waiters and waitresses,” Pakko said.

The broader leisure and hospitality sector is expected to add 19,226 jobs total during that time, projected to mark an 18% increase in employment, according to DWS.

AUTOMATION IN MANUFACTURING
Manufacturing is projected to lose 736,400 jobs nationwide between 2016 and 2026, according to BLS. In Arkansas, goods producing overall is projected to grow 5%, according to DWS, and manufacturing is projected to grow 3%, adding an estimate 4,590 jobs by 2024.

The DWS report projects non-durable goods production would make up half of the jobs, and a driving force in behind the growth could be food manufacturing, especially animal slaughtering and processing. Five non-durable goods industries were listed in the top 20 fastest-declining Industries list for 2014 to 2025, each losing more than 10 percent of its work force.

Growth in durable goods during the 10-year period is projected to come primarily from the transportation equipment manufacturing subsector, according to DWS.

While manufacturing is “still an important industry in Arkansas and nationwide,” it has taken a big hit in recent years, with little signs of recovery, Pakko said. The industry lost 35,000 jobs compared to 10 years ago, yet production is higher than it was, marking huge gains in efficiency through automation, he said, adding that manufacturing fell back during the Great Recession that started in 2008 and “has only just begun to creep back a little bit, more on the national level than the state level.

“It’s unrealistic to think it going to recovery to where we have employee numbers that are comparable to what we had 10 years ago,” Pakko said.

NEW SKILLS
Not only will the industry’s job market be smaller, the jobs will require different skills.

“It’s the people who run the computers who make the stuff who are getting the jobs now,” he said.

For that reason, Pakko said Gov. Asa Hutchinson is on track by focusing on the promotion of science, technology, engineering and math (STEM) education, with an emphasis on computer science.

“There is a sense a gap exists between the skills that are needed for tomorrow’s workforce” and the talent preparation conduits throughout the state, Pakko said.

That’s why a new legislative workforce panel has been formed, tasked with addressing the issue of talent pipeline shortfalls throughout the state.

Pakko said chambers of commerce throughout the state have told him there is a high demand for certain trades that might not require a college education, but need special training and skills, including welders and truck drivers. In terms of giving a grade to the state’s workforce preparedness for the upcoming decade, Pakko declined to make a prediction.

“It should be revealed and resolved over time, but we’re more likely to meet those needs in the future if we have clear, open eyes,” Pakko said, adding, “It’s up to the invisible hand to guide people to those careers where there’s higher demand.”

He’s confident, though, that young people are gaining skills that are going to be popular in the future. “Just ask a 13 year old to fix your cell phone,” he said.