Economy

Workforce Quality

Virginia has experienced both positive and negative trends in workforce quality. It employs a higher percentage of people in science and engineering than any other state in the nation, and has been successful both in providing higher education opportunities to its population and in attracting highly educated workers from other states. However, a percentage of adults with less than a high school diploma in some regions suggests significant weaknesses exist.

Why is This Important?

Workforce quality is closely tied to labor productivity, making it a key determinant of economic growth and wages. In today's dynamic economy, jobs increasingly require education beyond a high school diploma. Not only does education prepare individuals for the tasks required by a job, but it enhances an individual's ability to adapt to new working environments.

In recent years, knowledge-intensive industries have become a key contributor to the growth of the national economy and to U.S. exports abroad. Although this sector was hit unusually hard by the 2001 recession, skilled workers in knowledge-intensive industries generally experience lower rates of unemployment and faster wage growth than those in other sectors.

How is Virginia Doing?

Workforce in Science and Engineering Occupations, 2003. See text for explanation. Higher Degree Holders as a Percent of the Population, Age 25 Years and Older, 2005. See text for explanation. Less Than High School Diploma, Age 25 and Older, By Region, 2000. See text for explanation. Less Than High School Diploma, Age 25 and Older, 2000. See text for explanation.

The data reveals two opposing trends in the quality of Virginia's workforce. One view presents a remarkably well-educated labor force with a significant number of advanced degree holders. The other view shows a surprisingly low level of educational attainment among large segments of the population in some geographic areas.

Virginia, with its long history of educational achievement, has an impressively high percentage of skilled workers. In fact, Virginia has the highest percentage of the workforce in science and engineering (S&E;) occupations (5.79 percent) of the 50 states. The relatively high percentage reflects Virginia's large knowledge-intensive sector. Maryland's workforce is similar to Virginia's with 5.42 percent in S&E; occupations, while North Carolina (3.35 percent) and Tennessee (2.32 percent) were lower than the national average of 3.61 percent.

The percentage of Virginia's workforce with advanced degrees also demonstrates Virginia's commitment to education, as well as its ability to attract educated workers. In 2005, Virginia ranked third in the nation for the most master's degrees (9.5 percent) and doctorates (1.4 percent), and fifth for the most professional degrees (2.5 percent) as a percent of the population age 25 and over. Nationally, 6.9 percent of the population has a master's degree, 2 percent has a professional degree and 1.1 percent a doctorate degree. In comparing Virginia to its peers, Maryland ranked higher in all three degrees, with 10.4 percent having master's degrees, 2.8 percent professional degrees and 2.1 percent doctorate degrees. Virginia, however, ranked above both North Carolina (5.6 percent master's degrees, 1.4 percent professional degrees and 1 percent doctorate degrees) and Tennessee (5.2 percent master's degrees, 1.5 percent professional degrees and 1 percent doctorate degrees).

 

These achievements in workforce quality, however, mask a serious weakness in Virginia's labor market. In 2000, Virginia had the 21st highest percentage of adults, 18.5 percent, without high school diplomas among the 50 states. The national average was 19.6 percent. Alaska had the lowest percent at 11.6. The percent of Virginia's population without a diploma was lower than North Carolina (21.8 percent) and Tennessee (24.1 percent), but higher than Maryland (16.2 percent).

Disaggregating the data by region reveals that rural regions have the highest rate of population without diplomas. The percentage of adults with less education than a high school diploma was above 30 percent in the Southside and Southwest regions and above 20 percent in the Eastern, Valley and West Central regions in 2000.

What Influences Workforce Quality?

The existence of a skilled workforce in a state is an indicator of both the presence of industries that demand skilled workers and a measure of a state's ability to educate or attract skilled workers. Thus, workforce quality can be improved both by investing in education and by creating a business-friendly environment that attracts knowledge-intensive businesses and the skilled workforce that the businesses employ.

Looking at the other end of the spectrum, low educational attainment partially reflects the lower number of employment opportunities in the regions. Without employers who value education, individuals have less reason to invest in education and those who do obtain more education will migrate to higher employment regions.

What is the State's Role?

By investing in education and skill training and creating educational and workforce systems that can adapt quickly to new skill requirements demanded by the market, states can create a high quality workforce. For example, nearly 12,000 career readiness certificates, which certify individual employability skills, have been awarded by community colleges and one-stop centers since the program began in 2004.

Virginia is also working to retrain workers through its Workforce Investment Act (WIA) program. WIA has had success in assisting older youth, adults, and dislocated workers in finding and retaining new jobs. In 2005, 78.6 percent of adults entered employment and, of those, 85.3 percent had retained a job after two quarters. Rates were similar in the dislocated worker program, with 86.3 percent entering employment and 90.3 retaining a job. These rates are higher than the national average of 83 percent for adult retention and 88 percent for dislocated worker retention. However, economic conditions play an important role in explaining differences across geographic locations.

In addition, states can indirectly improve their workforce quality by promoting a business environment that attracts knowledge-intensive businesses. After these businesses enter the market, they will then demand skilled workers, which will induce more individuals to invest in their education and will attract skilled labor from other states.

Data Definitions and Sources

S&E; Occupations - SOURCES: U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment and Wage Estimates; and Local Area. Available at: National Science Foundation, Science and Engineering Indicators, 2006
http://www.nsf.gov/statistics/seind06/

S&E; occupations are defined by 77 standard occupational codes that encompass mathematical, computer, life, physical, and social scientists; engineers; and post secondary teachers in any of these S&E; fields. People with job titles such as manager are excluded. Because of this difference and the sample-based nature of the data, estimates for sparsely populated states and the District of Columbia may be imprecise.

Note: The District of Columbia has been omitted from the chart. The District of Columbia is an outlier with 19.84 percent in S&E; occupations, but this is partly due to a high percentage of people working in the District of Columbia and living in neighboring states.

Advanced Degree Educational Attainment - 2005 American Community Survey, U.S. Census
http://www.census.gov

Less than High School Diploma - U.S. Census, Educational Attainment 2000
http://factfinder.census.gov/home/saff/main.html?_lang=en

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Major State Programs

Virginia Workforce Network: Virginia Workforce Network (VWN) is the brand name for Virginia's system of one-stop career centers known as Virginia Workforce Centers, and other activities related to the Workforce Investment Act.

The Workforce Investment Act is a federal act that provides workforce investment activities, through statewide and local workforce investment systems, that increase the employment, retention, earnings and occupational skills of participants. As a result, this improves the quality of the workforce, reduces welfare dependency, and enhances the productivity and competitiveness of Virginia and ultimately the nation. www.vec.virginia.gov/vecportal/ wia/index.cfm

Community College Workforce Services: The Office of Workforce Development Services helps Virginia community colleges align education with economic development by preparing a skilled labor force. Community colleges serve more than 700 employers and more than 130,000 individuals in open enrollment and customized workforce training and services, contributing substantially to the economic development of their service regions. http://system.vccs.edu/
workforce/WDS/index.htm

Workforce Services Jobs Investment Program: The Workforce Services division of the Virginia Department of Business Assistance provides customized recruiting and training services to companies that are creating new jobs or experiencing technological change. As a business development incentive supporting economic development efforts throughout Virginia, the program reduces the human resource development costs of new and expanding companies throughout the Commonwealth of Virginia. Workforce Services offers consulting services, organizational development support, electronic media services, and funding. www.dba.state.va.us/workforce/ default.asp