Sitetrends – War for Talent 2017

SITETRENDS

WAR FOR TALENT WHERE THE WORKFORCE & JOBS LIVE JULY 2017 25 24 CONTENTS22 10 16 21 17 5 6 4 3 about global global united defining united war introduction global global global

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states states unemployment employment workforce populations perspectives &

talent generations a

domestic perspectives

perspectives

leading

markets INTRODUCTION

The “War for Talent” is a phrase commonly used to describe competition among businesses for quality and affordable labor. First used in the 1990s, the phrase became relevant as the United States shifted its economic focus from the Baby Boomer generation to Generation X, and as business leaders increasingly became aware of the link between talent attraction and competitiveness. Although this initial shift was characterized by the demographic change which accompanied the transition away from the larger Boomer population (who had long defined the consumer economy), the challenge associated with attracting the qualified and affordable labor necessary to sustain the consumer economy persists, even as the smaller Generation X now begins to give way to an even larger generation – the Millennials.

Twenty years have passed since the phrase War for Talent was coined, and with the passage of time, perspective has provided additional insight. The workforce has changed; people aren’t retiring with the same firm where they began their careers—a trend that has certainly accelerated over the past decade.

BUSINESS CHANGED

Brick and mortar retail is in decline while online purchasing is giving rise to warehouse development. Fresh outlooks are needed to transition to a new normal. Certain international trends also parallel and influence the quest for talent. Offshoring and outsourcing play a significant role in local employment trends, requiring workers to have strong talent to differentiate themselves from others.

The world is becoming a much closer-knit environment of cause and effect, especially as supply chains for goods are optimized and service economies are expanding to new markets where digital products are not limited by transportation costs.

The War for Talent is driven by population shifts. In retire in millions every year. Over time, technological the United States, a predictable population cycle has innovations allowed the cycle of larger followed by emerged over the past century. This cycle tends to smaller populations to accommodate sustainable run in 20-30 year periods in which larger population replacement of this workforce. cohorts are followed by smaller generations. However, as the Boomers now move into retirement, At the dawn of the 20th century the population of the members of Generation X are positioned to move into United States grew rapidly, first fueled by immigration the middle and upper stages of their careers at just and then as a result of people delaying the start of their the right time to capitalize on natural winnowing of families due primarily to the Great Depression and professional experience. This means that leadership the Second World War. People born between 1905 positions filled over the next ten years can uniquely and 1925 grew up during a period of unprecedented accommodate Generation X. immigration. They came of age at a time when jobs were initially very difficult to find and later when the In parallel with this transition is the entry of the Millennial consumer economy was secondarily stunted by war. population into the workforce. Millennials, generally in their early 20s to mid-30s, now represent a larger The post-war setting allowed Americans to finally population than the Boomers preceding them. While start a family and settle down into long term career there is clear evidence that this second population employment. At this time, the population of the United boom will mirror demands that Boomers put on the States grew quickly and thus created the Baby Boom consumer economy (more people will eventually need generation, a group which subsequently created a more products), some things have changed. The new consumer economy for all sorts of items: apparel service sector replaced manufacturing during the (the birth of style), recorded music (the Beatles), cars, coming of age of Boomers and the rise of Millennials. suburban housing, and products were all needed Information, in addition to products, is driving the or demanded by a generation larger than any in the market. Products are now manufactured in other history of the United States. countries, necessitating global supply chains driven by data-heavy logistics, further perpetuating data Yet, this growth didn’t continue forever. The smaller analytics services. Today’s global population wants Generation X that followed the Boomers may have goods manufactured in China to be as accessible to caused the consumer economy to slow without them as they were when the consumer could have productivity innovations, such as computer technology bought the good locally. and the internet, which allowed fewer people to do more with fewer resources. For a while, the sheer number of Boomers in the workforce offset the drop in numbers of the next generation. Today, Boomers

FIG. 1: DESCRIPTIONS OF GENERATIONS 1905-1925 1945-1965 GREATEST/GI 1925-1945 (BABY) BOOMERS SILENT GEN

1985-2005 1965-1985 MILLENNIALS 2005-2025 GEN X GEN Z

Future population projections indicate a second of three generations in their workforce to be a population contraction: Generation Z. Generation Z sustainable model. This allows for seasoned leadership, ranges from children born today up to high school mentoring, and on-boarding to happen in predictable students. Trends in employment similarities between cycles with the potential for career tracks to naturally Boomers and Millennials can also be linked to develop, thus promoting an environment suitable to a Generation X and Generation Z. Thus, five predictable meritocracy and predictable turnover. population cycles can be shown over the past 100 years in the United States, and while challenges exist in This analysis will compare the populations in key world finding appropriate talent in today’s workforce, these markets before examining specific job trends in the challenges have distinct benefits for the United States United States. To demonstrate the broad impact of economy. the War for Talent, we examine key regional global economies. For this paper, China and India will Figure 1 outlines the generational trends in the United represent Asia, Mexico and Brazil will represent Latin States. Many businesses employ multi-generational America, and Germany and the United Kingdom will workforces and find deploying significant proportions represent Europe.

This report examines certain key occupations and their relationship to all other jobs in the United States. Past employment trends have been forecasted to 2021 to model expected wage inflation and job growth and contrast this future five-year period with prior growth. Occupations were selected in order to represent key parts of the economy. These occupations include:

• All United States Jobs • Financial Clerks (Financial Sector) • Business Jobs • Customer Service Jobs • Software Developers (Services Sector) (Information Technology Sector) • Team Assemblers (Manufacturing and Production • Retail Workers Sector) (Retail Sector) • Material Movers • Administrative Jobs (Transportation and (Services and Support Sector) Warehousing Sector)

Wage inflation for targeted jobs shows growth in all sectors except team assemblers (production), which is flat, and retail sales, in which there is a decline corresponding to incremental gains for material movers (Figure 2). Wage inflation in IT will continue to outpace many other jobs as the demand for software developers continues to increase at record pace, both in the United States and abroad.

FIG. 2: RATE OF WAGE INFLATION

13% 7%

11% Δ 2012-2016 ALL Δ 2016-2021 JOBS 10%

9% % % 9 9 % % 9% 9 9 8% 8%

7% 7% 6% 6% 5.4%

RETAIL BUSINESS CUSTOMER SOFTWARE ADMIN MATERIAL FINANCIAL TEAM WORKERS JOBS SERVICE DEVELOPERS JOBS MOVERS CLERKS ASSEMBLERS

Wage growth for software developers is partially caused by the lack of available labor, which will not be able to keep pace with demand (Figure 3). High growth customer service and material mover jobs are evidence of a growing service sector and a consumer economy driven by online purchasing.

FIG. 3: JOB GROWTH

35%

% 9% 33 8%

Δ 2012-2016 ALL Δ 2016-2021 JOBS 22% 21% 19% 18%

% % 14 13 14%

11% 7% 4% 3% 4%

RETAIL BUSINESS CUSTOMER SOFTWARE ADMIN MATERIAL FINANCIAL TEAM WORKERS JOBS SERVICE DEVELOPERS JOBS MOVERS CLERKS ASSEMBLERS

-2% -3%

Nationally, business jobs, software developers, customer service, and material mover jobs are all increasing the number of available jobs in relation to all other jobs over the next five years (Figure 4). Team assembler jobs are expected to double their proportional representation in the market, meaning some metropolitan areas may become increasingly manufacturing based.

Conversely, retail jobs are expected to continue to decrease in numbers as buyers continue to flock to the virtual marketplace. Administrative jobs and financial clerks may be experiencing a reduction due to changes in computer utility, shifting these jobs to other specialists and using software to aid in tasking.

FIG. 4: GROWTH IN THE PROPORTION OF TARGETED JOBS COMPARED TO ALL JOBS

26% 26%

Δ 2012-2016 Δ 2016-2021 13%

12% 11% 9%

% 5% 6 6%

RETAIL BUSINESS CUSTOMER SOFTWARE ADMIN MATERIAL FINANCIAL TEAM WORKERS JOBS SERVICE DEVELOPERS JOBS MOVERS CLERKS ASSEMBLERS

-2% -3% -4% -6%

-9%

At the end of the day, the War for Talent will take place at the local level. Local employment trends in leading and emerging markets across the United States were captured and summarized to understand cost and availability over the next five years in those key cities. The intersection of high job growth and low wage inflation within a local market is valuable information, as is the opposite. This analysis helps to describe short and mid-term changes in leading and emerging job markets in the United States.

SITETRENDS: WAR FOR TALENT - JULY 2017 10 © 2017 Hickey & Associates. All Rights Reserved. FIG. 5: [SOFTWARE ENGINEERS/DEVELOPERS] ANNUAL JOB & WAGE GROWTH, 2016-2021 4% % 4 10% 9% % 10% 10 TRENTON SEATTLE 11% NEW YORK CITY % 1 % % 1 % 1 % 12 BOSTON % % 2 % 3 4 % % 3 1% % % 1 % 1 2 3 % -1 % 3 SAN 3 D.C. MADISON % 4% FRANCISCO 7 4% % CHICAGO % 4 % -2 4 0% BOULDER DENVER SAN % % 3% % JOSE 0% 5 2 1 BALTIMORE 3% CHAPEL RALEIGH LOS HILL ANGELES ATLANTA HUNTSVILLE DALLAS

Job Growth Wage Growth

Software engineer/developer jobs (one of the most sought-after industries) are expected to grow by 10% through 2021 in traditional West Coast markets and Greater New York (Figure 5). Atlanta, which is a large market, is expected to continue growing with more modest wage inflation than expected in top tier markets. Madison is expected to grow rapidly, while wages remain flat—likely as a result of growth in small and mid-sized firms. The market forces driving Madison’s rapid growth may lead to challenges for companies that don’t already have expansion plans underway there currently. Economic Developers will need to develop policies to continue growing, and ensure that wages remain competitive and the market remains unsaturated.

The proportion of jobs compared to the entire job market in these local areas gives some perspective on specialization (Figure 6). Markets supporting over 30 software development jobs per 1000 total local market jobs may be considered specialized. San Jose, San Francisco, and Seattle can thus be considered specialized markets. New York City, however, has fewer of these jobs in proportion to all other jobs due to its diverse economy. The larger volume of total jobs in New York accounts for the ability to add new software engineer jobs at the same pace as Silicon Valley. Specialization is also occurring in Trenton and Madison, following overall job growth trends.

FIG. 6: NUMBER OF SOFTWARE DEVELOPERS PER 1000 TOTAL IN MARKET JOBS 61

2016 2021

40 39

32 32 24 28 29 25 26 20 20 17 14 14 16 12 13 13 12 11 12 11 12 9 9 9 9 10 6 5 6 4 3

NEW SEATTLE SAN D.C. SAN ATLANTA BOSTON DALLAS CHICAGO LOS BOULDER TRENTON MADISON RALEIGH CHAPEL BALTIMORE DENVER HUNTSVILLE YORK JOSE FRANCISCO ANGELES HILL

11%

1% NEW YORK % CITY 4% 1% 2

% % 10 3 % 3 % 0 -2% ROCKFORD INDIANAPOLIS 4% CHICAGO LEBANON % % 4 3 % 2% % 2% 10 2 2% 1% LOS 3% ANGELES RIVERSIDE MEMPHIS -1% % PHOENIX -1% DALTON -3 0% ATLANTA SAVANNAH DALLAS 3% HOUSTON -4%

Job Growth Wage Growth

Warehouse laborers and material mover jobs are growing rapidly to support online purchases (Figure 7). These jobs are primarily located at the fringes of urban areas, but have recently been pushed into the urban core in an effort to achieve same day shipping. Wages for these positions are expected to remain somewhat flat despite this growth.

FIG. 8: NUMBER OF WAREHOUSE WORKERS PER 1000 TOTAL IN MARKET JOBS

2016 2021 67 60

41 40 39 38 37 34 35 35 32 30 26 27 26 23 23 23 20 16 19 17 13 15 8

NEW LOS CHICAGO ATLANTA RIVERSIDE DALLAS HOUSTON MEMPHIS PHOENIX SAVANNAH DALTON LEBANON ROCKFORD YORK ANGELES INDIANAPOLOIS

Already warehousing heavy, California’s Inland Empire (Figure 8, Riverside) is expected to become hyper- specialized in the transportation sector, and by 2021 nearly one in ten jobs in Memphis will be in a warehouse.

% 5 % % 11 % 3% 8 5 2% 3% % % 2 NEW YORK 1 CITY 3% 1% MINNEAPOLIS % BOISE 0 SALT LAKE CITY CHICAGO % 8 PROVO % 0% 6 1% % 0 2% % % 1 5 JOHNSON 5% 2% % LOS -4 % ANGELES 3% 0 PHOENIX 3% ATLANTA

% DALLAS 1 1% HOUSTON TAMPA Job Growth Wage Growth FT. LAUDERDALE

Customer service jobs have been re-shoring, a trend that may continue to drive growth in less traditional US markets such as Johnson, TN (Figures 9-10) where the volume of new jobs are helping to drive costs down. Phoenix and Provo, UT will also remain as job creators, but maintain low wage growth.

FIG. 10: NUMBER OF CUSTOMER SERVICE JOBS PER 1000 TOTAL IN MARKET JOBS

2016 2021 37

54 49 48

41 26 39 39 26 35 39 36 26 39 32

27 27 26 25 23 23 21 22 19 16 13 12

NEW CHICAGO PHOENIX ATLANTA DALLAS LOS HOUSTON TAMPA PROVO SALT JOHNSON BOISE FT. YORK ANGELES MINNEAPOLIS LAKE LAUDERDALE

11%

% % 1 -15 BATTLE CREEK 3% CHICAGO 4% 1% % MINNEAPOLIS -1 3% 0% WARREN % % -1 % 13 ROCKFORD 3 % -1% 1% 5 10% DETROIT 8% ELIZABETHTOWN 4% 8% % GREENVILLE 11 % ELKHART 2 LOUISVILLE 6% 0% 1% 1% 11% 5% LOS COLUMBUS SPARTANBURG % % ANGELES % 1 -4 4 -3% -2% LAFAYETTE 0% ATLANTA -4% NASHVILLE TUSCALOOSA

Job Growth Wage Growth

Ohio, Indiana, and Michigan may grow production jobs by 2021—with increased competition in Elkhart and northern Indiana, both are attractive enough to also see wages climb higher than other leading and emerging markets (Figure 11). Production jobs in Chicago will continue their steady decline as they are overshadowed by other sectors of the economy (Figure 12).

FIG. 12: NUMBER OF PRODUCTION ASSEMBLY JOBS PER 1000 TOTAL IN MARKET JOBS

220 2016 2021

132 118 100 89 76 67 71 66 66 60 57 57 57 43 49 43 30 33 35 29 19 18 23 25 10 11 6 1 5 8 9

ATLANTA WARREN CHICAGO LOS DETROIT NASHVILLE ELKHART COLUMBUS BATTLE LAFAYETTE TUSCALOOSA LOUISVILLE MINNEAPOLIS ANGELES GREENVILLE CREEK SPARTANBURG ELIZABETHTOWN ROCKFORD

The War for Talent is taking place at the local level, operations remain at full capacity. During the global but significant opportunity remains for companies economic crisis of 2008-2010, warehouse employment seeking to diversify their workforces by partitioning benefited from supplies of production labor as specializations into smaller functional groups and manufacturing slowed. Over the next five years, co-locating those groups in growing and emerging manufacturing is expected to continue a recovery markets. These smaller functional groups have the cycle and with the growth of online retail, many ability to grow organically in smaller markets without traditional warehouse markets may be stressed for overly stressing saturation levels. Diversification can labor. Convincing former retail workers to move from also leverage job training funds and development client facing stores to warehouses may be possible for incentives to help offset costs. only a portion of retail workers.

Certain jobs, such as software engineers, may be filled The hunt for top talent may ease if unemployment by opening offices in university towns like Madison, rises, but at the moment, the United States and Wisconsin, where those positions are expected to global unemployment rates are at historic lows. grow. These jobs are uniquely adept at adopting Harnessing the power of this talent is crucial to remote work environments and work-from-home firm competitiveness and expansion. The world is policies, so they might be closely linked to offices in becoming more interrelated with companies seeking more traditional markets through use of technology. to distribute goods and services into new markets Technology may also facilitate growth in customer every day. Overall, moves to leverage international service positions for similar reasons. and local opportunities have been successful and have had a significant impact on business growth both in Transportation and production jobs, however, will the United States and abroad. continue to be facility-based. However, these sectors expect slower job growth over the next five years in most markets. Retention of the most productive employees will be critical in ensuring these manual

CHINA 2017 100+ 95-99 Figure 13 shows the population of the United States as 90-94 85-89 represented by a population pyramid. Noted on the pyramid 80-84 75-79 are the associated generations described in Figure 1. The 70-74 cyclical trend population growth and decline is evident in 65-69 BOOMERS 60-64 this 100-year population pyramid. 55-59 50-54 45-49 Alternatively, China’s generational sizes appear heavily 40-44 35-39 exaggerated, a result of the One-Child policy in which the 30-34 MILLENNIALS government regulated the number of children born to each 25-29 20-24 family. The aging of China’s population is evident and it 15-19 10-14 remains to be seen what effect this policy will have on the 5-9 future workforce of China. 0-4 6% 0% 0% 6%

India’s population tends to be younger, but it is clear that its GERMANY 2017 growth reversed sometime around 2000. India’s population 95-99 90-94 pyramid mirrors the United States of 60 years ago. 85-89 80-84 75-79 70-74 FIG. 13: POPULATION PYRAMID - UNITED STATES 2017 65-69 BOOMERS 60-64 95-99 55-59 50-54 90-94 45-49 40-44 85-89 35-39 30-34 MILLENNIALS 80-84 25-29 SILENT GEN 20-24 75-79 15-19 10-14 70-74 5-9 65-69 BOOMERS 0-4

% % % % 60-64 6 0 0 6

55-59 INDIA 2017

45-49 90-94 85-89 50-54 80-84 GEN X 75-79 40-44 70-74 35-39 65-69 BOOMERS 60-64 30-34 MILLENNIALS 55-59 50-54

E 25-29 45-49 40-44 L 20-24 35-39 30-34 MILLENNIALS E A 15-19 25-29

10-14 L 20-24 M 15-19 GEN Z A E 5-9 10-14 5-9 F 0-4 M 0-4

6% 0% 0% 6% 6% 0% 0% 6%

FIG. 6: ESTIMATED POPULATION PROJECTIONS 2017

324,118,787* *US Population, 2017

1950 1970 1990 2010 2030 2050 2070 2090 2100

GERMANY CHINA INDIA UNITED STATES UNITED KINGDOM BRAZIL MEXICO

What will happen to these Asian economies remains Germany has seen its population plateau over the to be seen. Will populations stabilize and become past 50 years due to falling birth rates, a development cyclical like the United States, or will populations German policy makers have attempted to slow through decline dramatically over the next 100 years, putting increased immigration. Similar to China, Germany has the spotlight back on the United States’ labour? experienced broad generational population swings. Population projections (Figure 6) suggest the United Comparatively, the United Kingdom more closely States’ population will continue to grow while other resembles the United States (in terms of population economies shrink, even though their total numbers of trends) due to higher birth rates, liberal immigration people overshadow the United States. policies, cyclical generation trends and population growth projected for the next century. The population pyramid for Germany still shows the effects of WWII as women over 80 significantly outnumber men, due to the many casualties of war.

FIG 14: DECLINING BIRTH RATES

0 1960 1970 1980 1990 2000 2010 2015 2020

GERMANY CHINA INDIA UNITED STATES UNITED KINGDOM BRAZIL MEXICO

Latin American countries also project slower growth woman. The disparity between birth rates in the over the next 100 years. Figure 14 shows birth rates world’s leading economies and those of developing in these key economies from 1960 projected to 2020. countries in 1960 overwhelmingly shrank over the There is no disputing that growth has slowed in every next 50 years. Predictably strong declines in India, case. From a high of nearly seven births per woman Brazil, and Mexico foreshadow future limitations on in Mexico in 1960, nearly every country will be at or the workforces of those countries beginning in 15 to below the replacement value of 2 (children) in 2020. 20 years.

When reviewing birth rates in the United States, Declining birth rates may tighten labor markets in effects of the Baby Boom generation tapering off can countries we see today as expanding markets, placing be seen as birth rates fell from 3.5 in 1960 to under two extra strain on developing countries that will need in 1980. Since 1980, birth rates in the United States to continue growing their economies with smaller have weaved a trend around 2 from 1980 to 2015, workforces. As current workers age, these economies demarking the smaller Generation Z more recently. must invest in education, expand their service The United States’ trend since 1970 is mirrored by sectors, and utilization of technology, and transition similar birth rates in the United Kingdom, hovering agricultural workers to manufacturing. around the replacement value of two children per

FIG. 16: NET MIGRATION AS A PERCENTAGE OF LABOR FORCE Migration (Figure 16) to the United States 10.0% has been a consistent workforce supply, 8.0% outpacing other targeted countries and

representing 4% of the United States’ 6.0% workforce annually on average for the past 30 years. Countries, such as Germany, have 4.0% attempted to foster welcoming immigration policies, but changing policy landscapes 2.0%

may limit future growth both in the United 0.0% States and other countries. 1987 1992 1997 2002 2007 2012 2016 2018 2020

-2.0% Numbers and proportions of working age populations are shown in Figure 17. India -4.0% and Mexico’s younger demographic is clear, -6.0% as is the older population in Germany. The

sheer volume of China (806 million) and -8.0% GERMANY CHINA INDIA India’s (514 million) workforce is also evident. UNITED STATES UNITED KINGDOM BRAZIL MEXICO

FIG. 17: PROPORTION OF THE WORKFORCE BY AGE

% % 5.62 % 6.47 9.55% 7.84 14.79% 17.76% 21.26%

159M 514M 806M 110M 54M 45M 33M

66.26% 65.60% 73.22% 69.13% 65.93% 65.87% 64.47%

18.95% 28.79% 17.23% 23.03% 27.61% 12.87% 17.77% UNITED INDIA CHINA BRAZIL MEXICO GERMANY UNITED STATES KINGDOM 0-14 15-65 65+

FIG. 18: PROPORTION OF LABOR FORCE PARTICIPATION BY ECONOMIC SECTOR, 2015 79.1% 61.9%

49% 33.6% 36.1% % 30.3% 31% 24.1 20.3% 20% 13.4%

61.9% 0.6% 73.8% 83.5% MEXICO UNITED CHINA INDIA STATES 15.7% 13.3% 24.6%

1.6% 15.2% BRAZIL 1.3% GERMANY

UNITED KINGDOM

Agriculture Industry Services

In terms of the distribution of each targeted country’s workforce, Figure 18 demonstrates the similarities between the economies of the United States and United Kingdom. Both have very small agricultural employment sectors, due in large part to long histories of mechanization and crop prioritization. India and China, with reliance on labor-intensive rice harvests, have not made the investment into agriculture necessary to free up large segments of the population for other sectors. As education in India and China reaches rural areas, migration trends to urban areas may fuel growth in services and manufacturing. Alternatively, diversification of the economies of second tier Asian cities may also occur.

FIG. 19: PROPORTION OF GDP BY ECONOMIC SECTOR, 2015 79.5% 72%

% 45.4% 50.7 40.7%

% 29.8 80.2% % % % 21.8 19.4 16.4% 69.1 63.2% % 8.6 % 1.1% 6.3

33.1% 30.3% 19.2% UNITED INDIA CHINA BRAZIL STATES % 3.7 0.6% 0.6%

MEXICO GERMANY UNITED KINGDOM Agriculture Industry Services

Figure 19 shows the economic relationship between the employment sector and contribution of that sector to the overall economy. In the United States, Germany, and the United Kingdom, the proportion of workers in each sector is similar to the economic benefit to those economies. However, in India and China, a disproportionate number of workers are employed in agriculture. Nearly 50% of all workers in India participate in the agricultural sector, but produce less than 10% of that country’s GDP. Countries such as India, China, Brazil, and Mexico struggle to feed their populations and expend more effort to produce their domestic food supplies than the United States, Germany, and the United Kingdom.

The drain of agriculture on the economies of developing countries tends to affect the service economy of those countries in contrast to the United States where higher levels of educational attainment support a massive and growing service economy.

FIG. 20: SERVICES AS A PERCENTAGE OF GDP

80 Services (Figure 20) have been growing everywhere and in the 75 United States may represent nearly 80% of the economy by 2020. 70 Contributing to this growth are the generational cycles. Millennials 65 will continue to push the service economy to new heights, paralleling 60 the demands that the Baby Boom population put on consumer goods. 55

45 1990 1994 1998 2002 2006 2010 2014 2018

UNITED STATES EURO AREA EAST ASIA WORLD LATIN AMERICA SOUTH ASIA

FIG. 21: MANUFACTURING AS A PERCENTAGE OF GDP

Interestingly enough, the economic 40 crisis from 2008-2010 appears to have had an inverse effect on services (showing growth) compared 35 to manufacturing, in which broad

reductions in the representation 30 of the sector occurred. One likely global outcome of the economic crisis was a dynamic boost in service 25 economy production at the expense of manufacturing. Competition in 20 the United States and around the world for services may continue to

be increasingly competitive. 15 1990 1994 1998 2002 2006 2010 2014 2018

UNITED STATES EURO AREA EAST ASIA WORLD LATIN AMERICA SOUTH ASIA

Figure 22 shows the major trends in unemployment in the targeted economies. The effects of the global economic crisis of 2008-2010 are reflected in this figure. The economies of the United States, Europe, and Latin America (which are closely linked) experienced large unemployment swings. In the case of Europe, the economy has not yet fully recovered.

Since 1997, there have been three key events marked by 16-year cycles. Currently, unemployment is low both in the United States and in many other parts of the world. Some models indicate the current trend will begin to reverse itself over the next three years.

FIG. 22: UNEMPLOYMENT AS A PERCENTAGE OF WORKFORCE

14 16-YEAR PHASE 16-YEAR PHASE

2 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2020

UNITED STATES EURO AREA EAST ASIA WORLD LATIN AMERICA SOUTH ASIA

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