An Analysis of Low-Skill Occupations in Philadelphia
In the Economy League's recent analysis for the City of Philadelphia, we provided a detailed look at labor market data that provides a foundation for understanding dynamics and workforce opportunities in seven target industry sectors across the city and region. While our analysis highlighted compelling middle-skill job opportunities in Philadelphia, net job growth within the seven target sectors in the city over the past decade was driven predominantly by gains in the number of low-skill jobs. To better understand the occupational dynamics underlying this trend, the Economy League conducted supplemental analysis of notable low-skill occupations in Philadelphia.
This supplemental evaluation is based on analysis of occupational labor market data related to wages, total employment, employment growth, projected replacement openings, and potential to connect to career pathways. The Economy League also conducted qualitative analysis for several notable low-skill occupations identified through quantitative analysis—childcare workers, security guards, personal care aides, and home health aides. This qualitative analysis took the form of interviews with select local employers focused on critical trends within these occupations and how these occupations connect to career pathways in practice.
A Quantitative Framework for Assessing Low-Skill Occupations
Identifying a subset of low-skill occupations
The analysis summarized in the industry analytics report and carried forward here defines low-skill occupations as those that require less than a high school degree; or a high school degree and no work experience and less than a month of on-the-job training. This definition is adapted from a National Skills Coalition methodology and is based on educational requirements, work experience requirements, and on-the-job training requirements information provided by the Bureau of Labor Statistics.
Applying this occupational filter to the City’s seven target sectors yields a total of 208 low-skill occupations. To further narrow this set of occupations, the Economy League conducted analysis to identify occupations with scale sufficient for meaningful investigation, as measured by total employment, job growth, or replacement openings.
106 of the 208 occupations have fewer than 100 jobs in Philadelphia, and were excluded due to their small size.
Of the remaining 102 occupations, 63 occupations have between 100 and 999 jobs. In aggregate, total employment in these occupations remained flat between 2006 and 2016, and an average of just 9 replacement openings were projected across these occupations through 2024. Only one occupation added more than 20 jobs per year over the past decade (gaming dealers, which did not exist as an occupation in the city a decade ago) and only four occupations added at least 10 jobs per year. Due to these dynamics, the Economy League excluded these occupations from further analysis.
Applying these filters left a subset of 39 occupations within the target sectors—all low-skill occupations that employ more than 1,000 workers. This subset is small enough to analyze in detail and large enough to include occupations with a wide variety of wage and growth characteristics.
Developing a low-skill occupation matrix
To facilitate occupational comparisons, the Economy League developed a summary matrix that highlights key characteristics of the 39 low-skill occupations. The matrix sorts occupations by median wage levels and groups them into three subsets:
1) “High-wage, low-skill” occupations with a median hourly wage between $14 and $19 (11 occupations)
2) “Middle-wage, low-skill” occupations with a median hourly wage between $11 and $13 (11 occupations)
3) “Low-wage, low-skill” occupations with a median hourly wage between $8 and $10 (17 occupations)
These wage descriptors are relative—nearly all of these low-skill occupations pay less than the median wage of $19.61 in Philadelphia—but can help provide some differentiation when considering pay across the subset of low-skill occupations.
The Economy League then evaluated the scale, growth, and replacement needs of occupations within each of these wage groups by looking at 2016 employment; annual jobs added/lost (2006-2016), and; projected annual replacement openings (2016-2024).
The 39 occupations vary widely across each of these measures. To simplify analysis and bring clarity to how the occupations compare, the Economy League assigned each occupation values from 1-4 based on the quartile it falls in for each of these measures, and applied a color scale for quick visual comparison of occupations within each measure. Finally, the matrix includes a column in which the Economy League highlights notable occupations to further explore career pathways potential. A check mark in this column does not necessarily mean that there is an existing career pathways infrastructure for the given occupation, but instead indicates an initial qualitative assessment by the Economy League—based on scale, growth, projections, and wages—that the occupation warrants further investigation for career pathways potential.
Key Observations from the Quantitative Analysis
Not only has an outsize share of job growth in Philadelphia been concentrated in low-skill jobs, but it has largely been concentrated in low-wage, low-skill jobs.
The matrix reveals broad distinctions in size and growth patterns between the “high-wage, low-skill,” “middle-wage, low-skill,” and “low-wage, low-skill” wage groups. Many “high-wage, low-skill” occupations have a small employment base, have grown slowly (or contracted) in recent years, or both. Furthermore, most “high-wage, low-skill” occupations fall in the lower quartiles for projected replacement openings. In contrast, “middle-wage, low-skill” occupations include a higher concentration of large and growing occupations. However, as the color scale makes clear visually on the matrix, the highest concentration of large occupations with the most significant job growth in recent years and projected replacement openings going forward is among “low-wage, low-skill” jobs.
This is an important corollary to the finding from the industry analytics report: not only has an outsize share of job growth in Philadelphia been concentrated in low-skill jobs, but it has largely been concentrated in low-wage, low-skill jobs.
Still, there are select occupations within each group that present some promise from a workforce development perspective. The following discussion presents key characteristics for each wage group and preliminary considerations about potentially promising occupations within those groups.
“High-wage, low-skill” occupations
Wages are close to the citywide median. With median hourly wages between $14 and $19 per hour, annual wages in these occupations range from approximately $30,000 to $40,000 per year. Sector representation skews primarily toward Business & Financial Services and Manufacturing & Logistics.
The group is dominated by several small occupations and contracting large occupations. This group contains the highest number of small occupations among the wage groups—including occupations such as industrial truck and tractor operators, shipping and receiving clerks, and reservation and transportation ticket agents—and these occupations also have had minimal growth and are expected to have few replacement openings. And the larger occupations in this group, such as secretaries, customer service representatives, and office clerks all contracted during the past decade.
Some large occupations are projected to have a notable number of replacement openings. Customer service representatives and office clerks rank high among low-skill occupations in the number of projected replacement openings. In light of this, and the broad business-related skills developed on the job that could prepare workers for more advanced jobs, these two occupations are worth exploring further. Although smaller, the occupation of construction laborers also presents some promise, as it has experienced some job growth in recent years and because of the existing career pathways infrastructure within the Construction sector.
“Middle-wage, low-skill” occupations
Wages are a step above minimum wage, but well below the citywide median wage. With median hourly wages between $11 and $13 per hour, annual wages in these occupations range from approximately $23,000 to $29,000 per year. Most occupations are clustered in Retail & Hospitality and Manufacturing & Logistics, although occupations in Healthcare and Business & Financial Services present workforce development opportunities.
The group contains a mix of large and mid-sized occupations with notable growth and projected replacement openings. This wage group includes two very large occupations—laborers/freight stock movers and security guards—and both have grown over the past decade and both have among the highest number of projected replacement openings among all low-skill occupations. This wage group also has several mid-sized occupations, such as receptionists, maids and housekeeping cleaners, restaurant cooks, and janitors. The latter two occupations among those mid-sized occupations have added a significant number of net new jobs during the past decade and are projected to see a significant number of replacement openings going forward.
Several occupations—most notably security guards—present workforce development opportunities at scale. With the scale of employment, notable growth and high projections of replacement openings, laborers and freight movers is one low-skill occupation to explore further for career pathways potential, particularly with the existing training infrastructure in the Manufacturing & Logistics sector (although the effects of automation will likely serve as a headwind for this occupation going forward.) And despite smaller size and slower growth, receptionist jobs—largely concentrated in the Healthcare sector—could serve as stepping stones to other administrative positions not just in Healthcare, but across sectors.
The most notable scale and growth in this group is the occupation of security guards. Although the career pathways for workers in this industry is not obvious at first glance, the connection to the broader Business & Financial Services sector could present some opportunities for developing career pathways and is worth further discussion with workforce experts and employers.
“Low-wage, low-skill” occupations
Wages are at or near minimum wage. With median hourly wages between $8 and $10 per hour, annual wages in these occupations range from approximately $18,000 to $22,000 per year. Retail & Hospitality occupations account for the bulk of occupations in this wage-group, although there are key occupations in the Healthcare and Early Childhood Education sectors.
The group has several of the largest and fastest-growing occupations in the city. This wage group has several occupations with very large employment bases, such as retail salespersons, waiters and waitresses, combined food preparation and serving workers, and the Healthcare occupations of personal care aides and home health aides. Many of these also experienced the most significant job growth among low-skill occupations during the past decade and have high projections of replacement openings going forward. There are also several mid-sized occupations, such as childcare workers and bartenders, which have grown rapidly in recent years.
Career pathways potential among these occupations is mixed, but worth further exploration because of scale and growth. While many of these occupations have grown significantly and are a substantial source of replacement openings in the economy, low compensation is an obvious drawback for all of them – but there are some occupations that present opportunities. With the City’s focus on Early Childhood Education, further resource investment could help childcare workers advance within that sector. Other occupations such as personal care aides and home health aides could serve as a gateway to more advanced positions in the large and growing Healthcare sector. These occupations may not have strong existing connections to formal career pathways, but given their scale and the level of growth within the Healthcare sector, it would be prudent to explore ways to help workers in these occupations advance.
For many occupations in this wage group—particularly in Retail & Hospitality—the potential for career pathways at scale is not as clear as in other low-skill occupations. As discussed in the industry analytics report, there may be promise in exploring potential cross-sector pathways that build on the customer service skills and other business-essential skills developed in Retail & Hospitality jobs to position workers for opportunities in more advanced positions within other sectors. The scale of these occupations and the fact they have been a significant source of job growth in the local economy calls for attention to how to help these workers secure family-sustaining wages and stable employment—whether through workforce development efforts or other policy interventions such as the minimum wage and collective bargaining.
Employer Insights into Select Occupations
Several occupations highlighted in the quantitative analysis present opportunities for further exploration. Through a limited set of interviews, the Economy League gathered employer insights about a few notable occupations: childcare workers, security guards, personal care aides and home health aides. These occupations each employ a significant number of people, have grown rapidly during the past decade, and are projected to continue to grow quickly. Furthermore, they provide an opportunity to examine dynamics across diverse sectors in Early Childhood Education, Business & Financial Services, and Healthcare.
Given the limited scope of this supplemental analysis, the themes addressed here are superficial in nature. Time constraints allowed for just one interview for each occupation, and each interview was conducted with a large employer within each occupation to intentionally inject an employer perspective into this analysis. As a result, the discussion should be viewed simply as a sample of trends, challenges and opportunities within these occupations, providing initial insights into topics for further exploration.
Childcare Workers
With annual turnover that can reach 40% for pre-school occupations, recruitment and retention of workers is a significant and persistent challenge for early childhood education employers.
Recruitment and retention of childcare workers is a challenge and a top-of-mind issue. With annual turnover that can reach 40% for pre-school occupations, recruitment and retention of workers is a significant and persistent challenge for early childhood education employers. The recruitment challenge has become so great that the employer interviewed for this analysis recently created a new human resources position dedicated focused entirely on the issue, to the exclusion of any other human resources functions.
Unlike in other industries, where firms may be able to survive periods with lean staffing, the hyper-focused attention on recruitment in early childhood education is tied to the “ratio-driven” nature of the industry, as customer demand and funding are directly impacted by staffing levels. Stringent minimum requirements for candidates imposed by many multi-site operators of early learning centers can make meeting the desired ratios difficult. Entry-level teacher aide positions require a high school diploma or GED, along with a child development associate (CDA) certificate, and at least one year of experience. However, these entry-level requirements do not permit such workers to watch students alone. As a result, most new hires are assistant teachers, an occupation that provides employers more staffing flexibility but requires individuals to have at least two years of experience in addition to the educational requirements described above.
Workers are extremely sensitive to wage differentials. Contributing to recruitment and turnover challenges is the sensitivity of childcare workers to small wage differentials. Because of the low pay for childcare workers throughout the industry, the employer interviewed noted that workers will often leave a position for a 50-cent wage increase from another employer. These decisions are not always made with full consideration of the range of benefits and the stability of full-time hours that larger, more sophisticated early learning employers can provide and which may not be as prevalent at smaller, single-site operators.
There are a growing number of career advancement opportunities within ECE, but funding remains a key constraint. Low wages (childcare workers in Philadelphia earn a median wage of $21,000 per year) and advancement opportunities that offer only modest compensation increases (pre-school teachers earn a median wage of $28,000 per year) have made it challenging to create sustainable career pathways within early childhood education. The emergence of funding through programs like Pre-K Counts, however, has helped create new advancement opportunities for pre-school teachers within the early childhood education sector. These positions require a bachelor’s degree (compared with an associate degree required for the typical lead teacher) and pay $35,000-$45,000 annually. These higher-paying pre-school teaching roles help expand potential career pathways within early learning, but advancement opportunities for early learning workers are more plentiful in elementary education. The transition into elementary education is not seamless, however, as there are significant differences in skills and competencies needed for these two areas of education. And some early learning professionals hesitate to advocate for worker advancement into elementary education positions, as this pathway can create workforce gaps for early learning providers when talented employees more on to other opportunities.
Employers have a role to play in promoting career advancement through in-house support and apprenticeship programs. In contrast to most of their smaller, more constrained counterparts, some large early childhood education employers have the ability to support employee training and advancement. The employer interviewed for this analysis pointed to a comprehensive orientation curriculum for new hires, a commitment to promoting from within, as well as an informal process to work with employees who express interest in further educational opportunities. The employer is also exploring developing a mentor program to provide more formal support systems for assistant teachers.
A formalized process to help assistant teachers advance to lead pre-school teacher positions is underway via a new apprentice program involving District 1199C Training & Upgrading Fund and Community College of Philadelphia (CCP). Current assistant teachers with a Child Development Associate credential (CDA) go through the normal application process at CCP, and can use work experience to satisfy credits and obtain an associate degree more quickly. These students receive more targeted supports than they might if pursuing the degree on their own, with supports such as mentors and study groups organized by 1199C. Participating students are guaranteed incremental pay increases throughout the program, while the employer ultimately gets a more seasoned employee who may be more likely to remain with the organization.
Security Guards
The similar nature of these security guard positions outside of government services allows for relatively seamless transitions of employees across sectors, creating a broad web of intra-company advancement opportunities.
Security guards serve various roles in many sectors. With a significant number of jobs in the Business & Financial Services sector, security guards are a mainstay in Center City high-rises. Beyond this sector concentration, security firms serve clients across a range of sectors, such as retail, healthcare, hospitality, chemical/pharmaceuticals, and government services. And while government services clients often require a different cadre of security guard professionals—individuals with public safety and arms training—needs for clients in other sectors predominately require “friendly” customer service skills. The similar nature of these security guard positions outside of government services allows for relatively seamless transitions of employees across sectors, creating a broad web of intra-company advancement opportunities.
Unique job requirements—including background checks, drug tests, and odd hours—result in recruitment challenges for employers. At the large employer interviewed for this analysis, minimum requirements for entry-level security guard positions are fairly straightforward: a high school diploma or GED, as well as least one prior job experience. Because of the sensitive nature of these positions, entry requirements also include a drug test and criminal background check, which was reported to be a notable barrier in recruitment. New hires, however, can expect full-time benefits, and average wage of around $10.50, and, in many cases, full-time hours.
The 24/7 nature of the industry—with odd hours and overnight shifts common for entry level workers—can be a deterrent to potential candidates. It can also be a driver of turnover for new hires. And while the relatively high pay offered by security firms was once a key selling point for the occupation, increased wage competition from retail and service industry employers offering higher minimum wages is diminishing this positive wage differential.
Firms also face some common workforce challenges. It can be difficult to find candidates with the written communication skills needed to produce security reports that are sent to the client – a common responsibility for many security guard jobs. Furthermore, technological advances and the digital literacy gap creates challenges for security firms, as employees are expected to the basic skills needed to learn and use new security systems software.
There are career advancement opportunities internally with security firms, but cross-sector career pathways seem limited in practice. The large scale of several security firms generates opportunities for employees to advance internally, and some employers make this an explicit goal. The employer interviewed for this analysis stressed a commitment to promoting from within, reporting that new hires can be promoted as quickly as six months into the job. And while the firm will hire externally if candidates have the right education or experience, internal promotion does not necessarily require further education beyond the company’s internal training resources.
On-the-job training at large security firms can include a wide range of supports. Initial employee orientation provides training in customer relations skills, safety practices, and report writing. Recognizing the deficiency in writing skills in the candidate pool, the employer interviewed for this analysis developed an intensive writing and grammar course for new hires. Additional on-the-job training varies depending on the client, and can involve significant technology training. Employees have access to a comprehensive learning management system, with 500 courses to support employee development across a range of competencies. And as employees progress to a new role in the firm, such as site supervisor, there are tailored training “academies” for each role.
Rapid promotion potential in urban markets like Philadelphia is a function of the both the broad range of sectors and clients and a relatively high turnover rate. Firms can review employee perks and highlight success stories of individuals who have forged a career path at the firm, but turnover remains a key challenge for jobs at this wage level. The primary career pathway for individuals moving on from a security firm is into law enforcement; the opportunities for other cross-sector career pathways appear limited in practice.
Personal Care Aides and Home Health Aides
The home health care industry is more fragmented than most industries...mak[ing] it challenging to implement effective workforce solutions.
Large employers are positioned to offer competitive compensation, but can face common recruitment barriers. The employer interviewed for this analysis reported that, as with many other low-skill occupations, candidates must have a high school diploma or GED and must pass a criminal background check. Entry-level aides earn about $10.50 per hour on average, while individuals with certified nurse aide (CNA) certification can start out near $12 per hour or higher. And large employers like the one interviewed offer opportunities for full-time work with overtime pay and medical benefits.
However, overtime pay and benefits are not necessarily the industry standard. The home health care industry is more fragmented than most industries, with employment spread across many establishments. This broad distribution of jobs means that there is wide variation in the level of benefits that employers offer to their employees and makes it challenging to implement effective workforce solutions targeted to these occupations.
Large employers are able to provide comprehensive compensation packages, but other barriers for prospective employees—such as childcare and transportation—present challenges. Transportation challenges can be particularly acute as employees are required to travel to client homes, meaning travel often varies by day.
What is more, the variable nature of client needs can make for irregular scheduling demands. As such, employers place a premium on workers who are open to flexible schedules and emergency shifts. Providers adopt different approaches to managing this dynamic. The employer interviewed for this analysis maintains a small group of on-call “floaters” who are paid a higher wage and get paid whether they are called or not. However, the demands of unpredictable scheduling—such as the impact on employees’ own childcare needs—can both limit the pool of potential workers and can cause high turnover within this group of employees.
The composition of the home health workforce is unique. Home health organizations maintain a pool of aides from which consumers (patients) can select, but consumers can also choose to have a friend or family member provide care. This is a unique option not found in most industries, and means that the data on new jobs and replacement openings likely overestimate the true number of job opportunities for new workers who do not personally have a friend or family member that needs care. Still, there are not nearly enough friends and family members to meet the full demand of home health care needs, and employers require a sizable pool of career professionals.
Structured training opportunities are growing but are still limited in scale. For entry-level aides, the most concrete opportunity to advance within the healthcare industry is to obtain a certified nurse aide (CNA) certificate. CNA-certified individuals can work in more advanced roles within home health care or use the certification to work in inpatient settings, which often means higher pay.
An entry-level aide can pursue additional training to become a certified nurse aide on his or her own time, but apprenticeship programs provide more structured, streamlined opportunities for individuals to advance. The employer interviewed for this analysis recently partnered with District 1199C Training & Upgrading Fund to provide employees working 30 hours or more per week with the opportunity to participate in the apprenticeship program, continuing to work while they attend classroom training. As a new program, the first cohort was small—with four employees—but is expected to grow to about 15 employees for future cohorts.
New regulatory frameworks for care delivery could drive increased demand for home health services.
The upcoming implementation of the Commonwealth’s new managed care system—Community Health Choices—is likely to drive increased demand for home health care services in southeastern Pennsylvania. This new managed care system covers adults dually eligible for Medicaid and Medicare and is designed to promote home care rather than care at facilities as a way to both improve quality of life and cut costs. The employer interviewed expects this new system to result in increased demand for home health workers. However, tight margins are likely to remain a constraint for home health organizations, limiting their ability to pay higher wages commensurate with importance of these jobs.