Cape and Island workforce, population, in decline

Among the hardest hit sectors in the most recent recession was construction, with jobs decreasing by more than 21 percent.
File photo by Ralph Stewart

Among the hardest hit sectors in the most recent recession was construction, with jobs decreasing by more than 21 percent.

A new study released in December highlights trends in the Cape and Islands labor force, population, and education. As a region, we are getting older, fewer, but better educated, according to a joint report by the Commonwealth Corporation, and the Federal Reserve Bank of Boston.

The report concludes that because of the largely seasonal economy and limitations in the work force, the region was harder hit and is recovering more slowly from the 2008 recession than the rest of the state. The study is intended to help policy makers in business, government, and education make decisions about labor demand, education, and training opportunities in the future. The study also provides insight into how the region is changing.

Labor

The Cape and Islands labor market has taken a contrary path, compared to most of the other regional markets in Massachusetts, according to the study. With about 98,000 jobs, the region accounts for only 3.1 percent of the jobs in the state.

When the technology sector turned sharply downward in 2001, it had little effect on the local labor market. From 2001 to 2008, employment declined by 2.1 percent statewide. During the same period, the Cape and Islands actually added jobs, growing employment by 3.4 percent. The job growth rate was more robust than any other region of the Commonwealth.

The trends were also different when the 2008 recession hit, according to the study. The Cape and Islands experienced more severe job losses than the rest of the state, and was the slowest of all areas to add jobs in the early stages of the economic recovery.

The study cautions that the Cape and Islands workforce is, on average, significantly older than the rest of the state, or the nation, a trend that could pose serious challengers to employers in the near future.

“Given the age of the region’s population, it is not surprising that the civilian labor force in the Cape and Islands is also older than all other regional labor markets,” the authors of the study wrote. “In 2008-2010, 56.4 percent of the labor force in the region was 45 years or older, making it the only region to have over 50 percent of its labor force at such ages, and far exceeding the share in Massachusetts (44.4 percent) and the United States (42.0 percent).” The percentage of workers over the age of 55 increased substantially, from 20.7 percent in 2000 to 30.1 percent in 2010. During the same period, the number of workers aged 25 to 54 decreased substantially.

Only two sectors, health care and utilities, showed an increase in employment toward the end of the decade. All other sectors that were measured declined. Construction trades experienced a sharp drop, down 21.5 percent during the period from 2007 to 2009. Manufacturing decreased by 9.8 percent, and retail employment decreased 9.2 percent over the same period. The report estimates the region lost more than 5,300 jobs in the latest recession.

Population

Measured by the number of people who live in the region, the Cape and Islands is the smallest of the eight economic areas studied in the report. It was one of only two labor markets that declined in population in the past decade.

“A small and contracting population, combined with a nearly stagnant working age population and minimal growth in the civilian labor force raises demographic concerns,” the authors of the study wrote,” particularly given the age of the region’s residents.”

The population trends suggest younger people are leaving the region in larger numbers than other age groups. According to the study, the number of people aged 25 to 34 decreased by 5,418, or 2.7 percent, over the past decade. The number of people aged 35 to 54 decreased by 9,040, or 3.0 percent.

Though the population declined over the past decade, the potential work force, defined as people age 16 or over, grew slightly. In the first half of the decade, the number of working-age immigrants in the region grew at an annual rate of 6.9 percent. Over the same period, the region’s native-born workforce increased by 0.2 percent. Those trends reversed course in the second half of the decade. The number of native-born workers decreased by 0.4 percent, and the number of immigrant workers declined at an annual rate of 6.1 percent. The Cape and Islands was the only region to see a decline in its immigrant population.

Education

According to the report, both the region’s residents and its workforce, which includes people who commute from other regions to work here, have a high level of education, and the rate increased over the past decade.

“Massachusetts has one of the most highly educated populations in the nation,” the authors of the report wrote. “The education level of the Cape and Islands is almost comparable with that of the state.”

At the end of the decade, 39.2 percent of the local civilian labor force held a bachelor’s degree or higher, slightly lower than the 41.2 state average.

The report measured a higher percentage of workers in the region with some post-secondary education, including technical certificates and associates degrees, 70.2 percent, slightly higher than the statewide average of 67.8 percent.

In 2010, Cape Cod Community College issued 432 associates degrees. The Massachusetts Maritime Academy issued 185 bachelor’s degrees.

The future

The employment and population trends could make it more difficult to fill higher paying jobs, according to the report. “The region faces the demographic challenges of an aging population and potential shortfalls in workers with the education levels desired by employers,” the authors of the study wrote. “The region’s businesses may face a potential overall shortage of younger workers to replace baby boomers as they retire in the coming decades. The trend may be particularly troublesome given that 90.4 percent of the region’s employees are also residents of the region.”

The Commonwealth Corporation is a quasi-public organization within the state Executive Office of Labor and Workforce Development, charged with meeting the emerging needs of business and workers. The Federal Reserve Bank of Boston’s New England Public Policy Center provides objective research and analysis of regional economic issues, according to the joint study.