5/20/2019 Welcome & Opening Remarks 1 5/20/2019 Investors $2+ Million WEC Energy Group $500,000 Bradley Foundation JPMorgan Chase U.S. Economic Development Administration Wisconsin Economic Development Corporation $300,000 BMO Harris Northwestern Mutual $200,000 Bucyrus International City of Milwaukee Harley-Davidson (Foundation) Foundation $100,000 A. O. Smith Corporation Children's Hospital of WI Kenall Manufacturing MMSD Advocate Aurora Health Eppstein Uhen Architects Komatsu Mining QPS Employment Group Beer Capitol Distributing FIS Global Mandel Group Robert W. Baird & Co. The Boldt Co. Foley & Lardner ManpowerGroup Rockwell Automation Briggs & Stratton Corp. Froedtert Health Marquette University UW-Milwaukee MillerCoors $50,000 ABB Consolidated Construction Johnson Financial Group Reinhart Boerner Van Allegheny Technologies Deloitte & Touche USA Milwaukee County Deuren Associated Banc-Corp. Ernst & Young PNC Bank Trane Building Advantage Bank of America/Merrill Godfrey & Kahn Quarles & Brady Waukesha County Lynch GRAEF Racine County Wells Fargo Charter Manufacturing Haribo 2 5/20/2019 $25,000 Allen Edmonds Inland dba Colliers Milwaukee Hotel Collection SEEK Careers/Staffing American Transmission Co. KPMG Ozaukee County Spancrete Building Service Inc. Master Lock Park Bank Strang City of Oak Creek Mawicke & Goisman PAX Holdings Group von Briesen & Roper Employ Milwaukee Metal Era PricewaterhouseCoopers Waukesha Metal Products GenMet MGIC Investment Quad West Bend Mutual <$25,000 Addison Clifton Gateway Technical College Phoenix Investors Trostel Alpha Investment Consulting Patrick Horne/Northwestern PS Capital Partners Waukesha County Technical American Design Mutual PS Companies College AT&T Wisconsin JACOBS Shorewest Realtors Wenthe-Davidson Catholic Financial Life Masterson Co. Stantec Wixon CliftonLarsonAllen MKE Area Technical College Strattec Security Zimmerman Architectural CORE Consulting Miron Construction Syslogic Studios Cotter Consulting National Exchange Bank The Business Council Creative Business Interiors &Trust Trefoil Group Eagle Enterprises VISION Grow, expand & attract world-class businesses Create high-value employment Vibrant quality of life 3 5/20/2019 TOM BARRETT M7 Co-Chair Mayor of Milwaukee Can the Milwaukee Region compete? The challenges of disruption JON ROBERTS Principal & Managing Director, TIP Strategies 4 5/20/2019 WHY MILWAUKEE IS DESTINED TO FAIL Because all our cities are destined to fail. 5 5/20/2019 THE CRISIS IN OUR PROFESSION The draw of major metros is undermining both our rural communities and our mid- size cities. Meanwhile, major metros increasingly struggle with disparity in wages, social equity, and rising housing costs. 6 5/20/2019 FORUM 2019 MILWAUKEE 7 ECONOMIC DEVELOPMENT PARTNERSHIP Jon Roberts May 16, 2019 1 INTRODUCTION 7 5/20/2019 TIP STRATEGIES Founded in 1995, we have over 23 years of experience in over 300 communities across 40 states, and 5 countries. Four principals with a total staff of 14. Committed to holistic thinking & sustainable development. Austin, Seattle, and Boston offices with global reach. OUR PRINCIPALS Tom Stellman Tracye McDaniel CEO/Founder President Jon Roberts Jeff Marcell Managing Partner Principal 8 5/20/2019 2 NATIONAL TRENDS The Geography of Jobs Net Job Gains/Losses by Metropolitan Statistical Area Source: U.S. Bureau of Labor Statistics, Current Employment Statistics; TIP Strategies 9 5/20/2019 Job recovery periods compared Job recoveries lag official recessions – now more than ever Peak employment = 100 2007-2014 1980 1974-1976 1981-1983 2001-2005 (May 2014 = 100.1) 100 1990-1993 78 months 99 98 97 96 95 94 93 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 Number of months until all jobs "regained" Sources: U.S. Bureau of Labor Statistics, Current Employment Statistics (total nonfarm employment, seasonally adjusted). Note: While we typically associate recessions with job growth, they are officially defined by a wider range of variables than just employment. The dating committee of the National Bureau of Economic Research retroactively defines the start month and end month of official recessions in the US. According to NBER, the most recent recession began in December 2007 and ended in June 2009 – five years before employment levels had fully recovered. Educational attainment of the US labor force Share of the US civilian labor force age 25 years and older Share of the civilian labor force that has earned at least a bachelor’s degree 41% 59% Share of the civilian labor force over 25 that does not have a 4-year degree Source: US Bureau of Labor Statistics (Current Population Survey), 2018 annual average Note: The metric for educational attainment is usually presented relative to the population. This chart looks instead at a relevant subset of the population: the civilian labor force. 10 5/20/2019 Unemployment rate by educational attainment Unemployed share of the US civilian labor force age 25 years and older LESS EDUCATION MORE EDUCATION 4.0% 2.1% Unemployment rate for Unemployment rate for the share of the labor the share of the labor force over 25 without a force over 25 that has four-year degree earned at least a bachelor’s degree US Bureau of Labor Statistics (Current Population Survey), 2018 annual average Note: The metric for educational attainment is usually presented relative to the population. This chart looks instead at a relevant subset of the population: the civilian labor force. The Dotcom recovery trend was just a warm-up… Cumulative change in employment (millions) from March 2001 Source: US Bureau of Labor Statistics, Household Survey (Current Population Survey); National Bureau of Economic Research. Note: Employment is seasonally adjusted and includes all workers age 25 and older. The National Bureau of Economic Research (NBER) officially dates the Dotcom Recession as March 2001 through November 2001 (9 months total). 11 5/20/2019 …the gap widened after the Great Recession Cumulative change in employment (millions) since December 2007 Source: US Bureau of Labor Statistics, Household Survey (Current Population Survey); National Bureau of Economic Research. Note: Employment is seasonally adjusted and includes all workers age 25 and older. The National Bureau of Economic Research (NBER) officially dates the Great Recession as December 2007 through June 2009 (19 months total). The reset is real… 12 5/20/2019 Manufacturing dropped from 25% to 9% of all jobs in just under 50 years. Structural economic change Sources: U.S. Bureau of Labor Statistics, Current Employment Statistics (total nonfarm employment, not seasonally adjusted). Note: Industry classifications have changed over the decades. The grouping of broad sectors in this chart is the closest possible match to consistent definitions. 13 5/20/2019 Can post-WWII job growth continue at the same pace? If so, how? Source: US Census Bureau, International Database; US Bureau of Economic Analysis, Current Employment Statistics Notes: Population estimates and projections are for the resident population. Population estimates for 2010-2017 are consistent with the 2010 Census. Population data in the IDB for 2018-2050 are based on the 2014 National Projections. Evidence of an ongoing talent shortage Reasons for hiring difficulty 26% 21% 16% 14% 7% Lack of Lack of Looking for Lack of hard Lack of soft available experience more pay than skills skills applicants/no is offered (technical (workplace applicants competencies) competencies) Tight labor Transitioning Wage Skills market workforce Gap? Mismatch Source: ManpowerGroup's 2017 Talent Shortage Survey 14 5/20/2019 Looming retirements Age distribution of employed workers, as of October 2018 35 million employed workers are or will be eligible to retire in the next 10 years 23% 55 & over Source: Emsi – QCEW Employees, Non-QCEW Employees, and Self-Employed Solving the problem is politically fraught Raise retirement age Liberalize immigration Automate jobs Outsource work 15 5/20/2019 3 DISRUPTION: MAKING SENSE OF THE RESET 16 5/20/2019 MANUFACTURING HEALTH CARE John A. Rogers, University of Illinois, F. Seitz Materials Research Laboratory Google ENTERTAINMENT TRANSPORTATION THE LABOR FORCE Massive disruption in the number of workers and the skill sets they require 17 5/20/2019 SUPPLY CHAIN Entire business units cease to exist and secondary providers disappear Abandoned Factory in Albemarle NC by albemar78 via Flickr (CC BY 2.0) SOCIAL NORMS Culture shock around changing behaviors. 18 5/20/2019 Talent: Do jobs matter? Job shifts further erode the middle class. 19 5/20/2019 “Technology is automating some tasks, but most jobs are not disappearing. They are evolving.” –Vanguard Research: Megatrends, “The future of work” X 20 5/20/2019 Snapshot of the US workforce in transition Selected occupational job postings in 2018 PRINTING TOOL & DIE TRAVEL SCRUM BARISTA PRESS MAKER AGENT MASTER OPERATOR Job Postings 551 1,945 3,998 16,043 54,157 Top 5 MSAs Chicago Chicago New York Washington Los Angeles Minneapolis Detroit Chicago New York New York Kansas City Milwaukee Los Angeles Chicago Chicago Columbus, OH Cleveland Philadelphia Dallas/FW San Francisco Dallas/FW Los Angeles Dallas/FW Philadelphia Seattle Top 5 skill Preventive Blueprints / Microsoft Scrum agile Food requirements maintenance Milling Office / methodology preparation / posted / Quality machines / Global / Agile Hazard control / Micrometers / Distribution Software analysis and Mathematics / Preventive System / Development critical control Micrometers / maintenance Sabre / / Software