Executive Summary:

The Bluegrass Economic Advancement Movement region encompasses the Louisville and Lexington MSAs and the corridor between them. It is an area with much of the manufacturing, medical and transportation & warehousing industries of Kentucky contained within. Over 36% of the population and 38% of the Kentucky labor force live and work in this region. This report analyzes the labor market structure within the region. We also examine the labor market structure in five Workforce Investment Act Regions: Bluegrass, Lake Cumberland, Lincoln Trail, Kentuckiana Works, and Indiana Region 10. We examine employment at the industry and occupation level and project employment growth for the regions. We examine important inter-industry linkages, and how these linkages may be important for attracting and maintaining the manufacturing base, in spite of a 30 year decline in manufacturing employment. We also examine the educational attainment of the regions and consider whether the workforce has the mix of education best suited to growth. Finally, we examine the age structure of occupations important to the regions. As is well known, the baby boomer generation is approaching retirement age. While the impact of the aging population will be felt across all occupations, we examine general characteristics which point to certain types of occupations as having a preponderance of workers in these age categories.

Our main findings:

  • Manufacturing employment will continue to grow at a slower rate than employment in other sectors. The predicted growth in the level of manufacturing employment is a change from the last decade, but consistent with the overall trend in manufacturing as a decreasing proportion of employment.
  • Two key inputs to manufacturing in the BEAM region, and particularly Auto Manufacturing, are the Transportation & Warehousing and the Wholesale Trade industry. 2 The BEAM region has an important cluster in these industries, and this strength could be used to attract additional manufacturing to the region.
  • The Health Care industry, already a primary employer in the region, is projected to grow quite rapidly during the next decade. While health care is not generally an input into manufacturing or other industries, access to high quality health care can be used to attract firms in other industries to the region.
  • In many of the manufacturing industries, the BEAM region has a relatively high concentration of production workers and a low concentration of management. This raises concerns that these industries are not attached to the region. Attracting management requires a highly educated labor force. Without this, attracting large firms will be difficult.
  • Employment of production workers is likely to grow slowly over the next decade. In contrast, while starting from a small base, transportation and materials handling employment is likely to grow quite rapidly.
  • Two types of medium skill occupations are likely to have high growth. All medical technology and technologist occupations and nursing are projected to experience rapid growth. We focus on these two as they require less education (typically an associate’s degree) than many of the other high growth occupations (physicians for example). Similarly, skilled workers in transportation and manufacturing, including truck drivers, welders, computer control programmers and similar occupations are predicted to grow (although at a slower rate). Again, these are occupations with medium skill and education levels.
  • We find that higher paying medium skill occupations (again, truck drivers are an excellent example) are highly skewed toward baby boomers, and thus likely to experience even higher demand.
  • Kentucky continues to lag behind competitor states in its production of highly educated workers. Much of the employment growth will be concentrated in occupations requiring a minimum of a bachelors degree. As noted above, attaching large firms to the region requires an educated work force. Kentucky is failing to produce a large enough pool of these workers to sustain the growth predicted.

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