A Sustainable Workforce Starts With You

Uneven Job Gains, Continued Losses Underscore Urgency in Upskilling

The following article was authored by Peter Beard, Senior Vice President for Regional Workforce Development at the Greater Houston Partnership, and originally published on Houston.org.

The Houston area has regained a significant amount of the jobs it lost since last March, but recovery has been uneven between economic sectors and full recovery may not be achieved for several more years. This is according to the December 2020 regional labor market data and information report, released January 22, 2021. Employment gains and continuing losses have acute implications for workers, job-seekers and workforce development initiatives in the region.

By December 2020, the Houston area had recovered roughly 60 percent of the 350,000 jobs lost over the preceding March and April, according to Parker Harvey, an economist with the regional workforce development agency. This rate of recovery remains impressive compared to previous downturns where a return to pre-recession employment levels took three to four years. Nonetheless, given the ongoing effects of the pandemic for the foreseeable future, the current recovery rate is likely to improve only moderately with each new jobs report making for a full recovery in three to five years according to various predictions. (Related: December ’20 Monthly Update: Houston Metro Employment)

The report also provides information for the region’s overall employment as well as an industry-by-industry look at what has changed since December 2019 and December 2020, including the over-the-year changes in the Houston Metropolitan Statistical Area’s industry supersectors (aggregates of related sectors). Currently 10 out of 11 supersectors show year-over-year declines in employment of which the top three are leisure and hospitality (-36,300), construction (-24,500) and manufacturing (-21,800). 

In addition, Harvey provided the following overall analysis of the data: 

  • Job growth this past December was in line with historical trends, up 10,600 jobs (not seasonally adjusted) or 12,300 (seasonally adjusted) with most growth coming from retail, leisure and hospitality, and health care. While positive, these figures did not increase the overall percentage of jobs recovered from March and April’s historical declines as reported in November.
  • Upstream oil and gas, manufacturing, and wholesale trade added several hundred jobs each in December however all continue to show no recovery of jobs lost last March and April. In contrast, all other major sectors have recovered at least some percentage of jobs lost, jobs lost, including modest recovery in information and significant recovery in transportation, warehousing and utilities.
  • Initial claims for unemployment insurance (UI) show moderate increases between January 2 and January 15, 2021. Whether this is due to deferred filings until after the holidays or a meaningful change in trend is unclear, however, national figures, which are seasonally adjusted, have risen above 900,000, which supports the case for a meaningful trend. Unofficial claims data for Houston area shows a growing share of long-term unemployed workers.
  • The unemployment (UE) rate continues to see dramatic swings of nearly 1 to 1.5 percentage points from month to month. If recent large changes in the UE rate are a reflection of actual labor market dynamics rather than distorted estimates, it would suggest nearly 50,000 workers switch from unemployed to employed and back on average each month. 

Given the declines in 10 out of 11 supersectors, it is clear that coming into the new year one of the region’s more important challenges will be upskilling and redeploying the more than 150,000 residents who remain without jobs due to the pandemic and the economic recession. This will require us to focus on upskilling these displaced workers into new occupations and to earn a living wage. We expect the skills requirements for many occupations will have changed in light of the pandemic and the increased use of technology. As many of us know, the longer individuals remain unemployed their skills will atrophy, and it will be harder to connect them to the services and skills programs they will need. 

Over the next few months, the leadership of the Partnership and its UpSkill Houston initiative will be working with key business leaders, employers, community colleges, community-based organizations, and the public workforce system to address this challenge in order to support a stronger economic recovery for the region.

Learn more about the UpSkill Houston initiative.