Industry Needs Educated, Skilled Employees

1. Industry Needs Educated, Skilled Employees Joe W. Arnold Government Affairs Manager, BASF Chairman, Workforce Committee Texas Association of Manufacturers

2. Troubling Statistics • 75 million baby boomers are approaching retirement age • For the next 18 years, 10,000 baby boomers will reach retirement age each day • More than half of the US population is over 50 • Forty five percent of the employees at BASF in Texas will be eligible for retirement over the next 5 years. • Greater competition for qualified / skilled workers to fill open and newly created jobs

3. COMPETITION FOR SKILLED WORKERS Construction • Employs over 5 million • 20% of workforce expected to retire in next 4-6 years Healthcare and Medical • Employs over 16 million, 40% >50 yrs old • Industry predicts: 20% shortage of workers by 2015 & 29% by 2020 Manufacturing • Nearly 14 million employees • > 80% of employers report a shortage of qualified employees • 46 % of employers report that “finding qualified employees” is one of their most serious problems

4. Not Enough People in the Pipeline • Why? • Misalignment of training / education programs to current and future jobs • Education community paradigm that a bachelor’s degree is the only path to prosperity.

5. Misalignment of Education/Training and Jobs Poll: Recent college graduates not finding jobs. A new survey of college graduates from the past five years finds that they are in low paying jobs often unrelated to their education. “Eighty three percent of them worked when they were in college. They’re making sacrifices to go through with this, and they’re coming out without a great job and with debt. That’s not a great situation.” --May 22, 2011 Cliff Zukin, Rutgers University Source: Richard Froeschle TWC

6. The Rules Have Changed • “One of the greatest changes is that a college degree is no longer the guarantor of a middle-class existence. Until the early 1970s, less than 11 percent of the adult population graduated from college, and most of them could get a decent job. Today nearly a third have college degrees, and a higher percentage of them graduated from non-elite schools. A bachelor’s degree on its own no longer conveys intelligence and capability. To get a good job, you have to have some special skill … that employers value.” The Dwindling Power of a College Degree New York Times Published November 23, 2011

7. The Rules have Changed • Education is not the same as training. • Industry needs educated, skilled employees.

8. Disparity of Bachelor & Associate degrees in earnings Don’t college degrees mean earning a higher wage?

9. Disparity of Bachelor & Associate degrees in earnings Source: Richard Froeschle TWC

10. Disparity of Bachelor & Associate degrees in earnings Source: Richard Froeschle TWC

11. A Recent Snapshot 80.9% Source: Richard Froeschle TWC

12. Not a Short Term Problem Brookings Institute Study “…commercial development in the next quarter-century will eclipse anything seen in previous generations…” “…nearly half of what will be the built environment in 2030 doesn’t exist yet…”

13. BASF Specific • Starting salary for Process Tech $48-52k annually with potential to earn six figures with overtime. (Positions top out at around $40 per hour) • On average, Freeport site hires 20 to 24 Prod. Techs annually • Additional 20 employees in 2014 • Additional 75 employees in 2013 (mix of Bachelors, Associates and certified employees)

14. Thank You Questions?