Comparing Employment Distributions for the U.S, Wyoming, and Bordering States

Comparing Employment Distributions Among 22 Major Occupational Groups for the U.S., Wyoming, and Bordering States

by: Deana Hauf, Economist and Craig Radden Henderson, BLS Program Supervisor

"Comparisons with bordering states and the U.S. indicate the percentages of employment distribution are higher in Wyoming for 4 of the 22 major occupational groups"

Geographical differences in employment among states largely reflect patterns of industry distribution.¹ When an industry represents a proportionally larger share of state employment than U.S. employment (e.g., Mining in Wyoming), the industry’s staffing pattern exerts greater influence on the overall occupational mix of the workforce. For example, construction and extraction workers represent a proportionally higher percentage of Wyoming’s workforce compared to the U.S.

Occupational distribution is also influenced when firm sizes in a state vary considerably from the national average for an industry. In 1996 research showed that “across Wyoming, approximately 89.5 percent of all firms fit into the small category [fewer than 20 employees]. This leaves only approximately 10.5 percent of businesses with 20 or more employees.”² These small firms accounted for approximately one-third of Wyoming employment. Approximately five years later, small businesses still accounted for 89.5 percent of Wyoming firms and 34.1 percent of employment.³ Smaller firms tend to hire more ‘generalists’ (e.g., an office manager) and need fewer in-house occupational specialists (e.g., receptionist, bookkeeper, sales clerk, payroll clerk, customer service representative). A small company needing an occupational specialist (e.g., environmental engineer, hydrologist, computer programmer) may contract with a self-employed individual rather than hire a full-time, permanent employee. All of these considerations provide a general context for us to examine how Wyoming’s occupational distribution differs from that of bordering states and the U.S. and what these differences may suggest about future occupational demand.

In this article we compare Wyoming, regional (i.e., Wyoming’s six bordering states), and national occupational employment distributions among 22 major occupational groups⁴ to demonstrate geographical variances in the demand for labor. Furthermore, we identify some potential risks and opportunities for Wyoming employers related to these trends. Where Wyoming’s demand for labor converges with regional or national demand, competition for skilled workers may increase should the national or regional economy regain momentum.⁵ Because the economic health of Wyoming appears steadier and stronger than that of the nation, the present situation may hold a window of opportunity for Wyoming employers and economic developers to recruit workers in higher-demand occupational groups.

Data Collection

This article compares employment and wage information collected through the 2001 Occupational Employment Statistics (OES) Wage Survey (published in 2003). Each state conducts an identical OES wage survey using standard techniques, which facilitates comparison of data among states and with national data. Employment and wage estimates for the U.S. and all 50 states are located on the U.S. Bureau of Labor Statistics website, http://stats.bls.gov/oes/.

The OES Wage Survey uses the Standard Occupational Classification (SOC) system. The SOC system allows government statistical agencies and others to produce comparable data using common occupational categories and definitions. Prior to the adoption of the SOC system in 2000, federal agencies collecting occupational data used a variety of coding systems that were not necessarily comparable to one another.

In the SOC system, all workers are classified in one of over 820 occupations according to their occupational definition. To facilitate analysis, occupations are combined to form 22 major, 96 minor, and 449 broad groups of occupations based on similarity of job duties, skills, education, or experience. This article is based on three years of data (1999, 2000, and 2001) representing the 22 major occupational groups.

The OES survey defines employment as the number of full-time or part-time employees, including workers on paid vacations or other types of leave; workers on unpaid short-term absences; salaried officers, executives, and staff members of incorporated firms; employees temporarily assigned to other units; and employees for whom the reporting unit is their permanent duty station regardless of whether that unit prepares their paycheck. The survey excludes the self-employed, unpaid family workers, and owners of unincorporated firms. Employees are reported in the occupation in which they are working, regardless of training or education.

Unemployment Insurance (UI) files provide the universe from which the OES survey draws its sample. The employment benchmarks are obtained from reports submitted by employers to the UI program.⁶ In some nonmanufacturing industries, supplemental sources are used for establishments not reporting to the UI program.

Geographic Comparisons of Employment and Hourly Wage Data

As shown in Table 1, Wyoming has lower total employment than its bordering states, likely a reflection of our smaller population. Additionally, Wyoming has the third lowest hourly wage ($14.17), exceeding both South Dakota ($12.93) and Montana ($13.27). The U.S. mean hourly wage ($16.35) is 15.4 percent higher than Wyoming’s wage. In our seven-state analysis, only Colorado ($17.32) tops the U.S. wage. Colorado also surpasses the other states in total employment.

Geographic Comparisons of Occupational Employment Distributions

Table 2 shows the employment distributions among the 22 major occupational groups for the U.S., Wyoming, and Wyoming’s bordering states. The percentage of employment distributions are shown in Table 3. Comparisons with bordering states and the U.S. indicate the percentages of employment distribution are higher in Wyoming for 4 of the 22 major occupational groups. These four groups (lightly shaded) include construction and extraction occupations; transportation and material moving occupations; installation, maintenance, and repair occupations; and life, physical, and social science occupations. These patterns largely reflect the importance of Mining in Wyoming and related industries such as trucking and equipment repair services. It also reflects the need for natural resources expertise in both the private and the public sectors.

Wyoming trails all bordering states and the U.S. in the percentage of employment distribution for five major occupational groups (darkly shaded), notably office and administrative support occupations; computer and mathematical occupations; and arts, design, entertainment, sports, and media occupations.

The Figure illustrates, for selected occupational groups, Wyoming’s disproportionate percentages of employment distribution as compared to the U.S. and three bordering states. Montana was selected because, in many respects, it is more similar to Wyoming in population and industry distribution than other bordering states. Colorado and Utah, having large urban centers in close proximity to Wyoming, serve as comparisons of competitive demand for labor in certain occupational groups.

Both Table 3 and the Figure show that Wyoming has occupational employment distributions which generally stand on the periphery of regional and U.S. trends. In addition to the percentages of employment distribution for the nine occupational groups shaded in Table 3, only Montana has a higher distribution than Wyoming in three additional occupational groups: food preparation and serving related occupations; community and social services occupations; and building and grounds cleaning and maintenance occupations. Montana also has a lower distribution in production occupations. Most of the occupational groups which are seemingly overrepresented in Wyoming consist of occupations which require some form of on-the-job training. The exceptions include community and social services occupations (e.g., counselors, social workers, probation officers) and education, training, and library occupations. Some jobs within these occupational groups require extensive academic training. These two occupational groups are probably represented in greater relative numbers in Wyoming (and Montana) than other states, because Local Government, the industry which primarily consists of these occupations, is a presence in even the smallest communities.

The occupations found in Wyoming tend to require different skills than those found elsewhere. In particular, many of Wyoming’s largest occupations rely on more on-the-job training than post-secondary training or education. As a result, experience may be more valuable than education for many occupations. Even among occupations requiring education, experience may still be necessary to gain employment. However, how can workers gain experience with fewer in-state opportunities available within so many occupational groups? This is one dilemma facing Wyoming’s labor market.

Also, less occupational diversity increases Wyoming’s dependence on fewer experienced workers. Presumably, this dependence leaves the state more vulnerable to unexpected shifts in the regional or national labor demand. Without strategic planning, economic growth outside of Wyoming could result in higher costs and other risks (e.g., a loss of institutional memory) for some businesses when competition for skilled workers increases.

The current analysis does not reflect data about the actual training and educational characteristics of Wyoming workers, but many workers may hold jobs unrelated to their education or job training. These workers may be poised to seek jobs when openings in their chosen field do occur. As the Figure indicates, a larger proportion of Wyoming’s workforce is employed in food preparation and serving related occupations than most of its neighbors. This count is likely a reflection of limited industry and occupational diversity rather than the aspirations and skill sets of the Wyoming workforce.

The presence of several overrepresented occupational groups in our state may serve as an insurance policy of sorts for the status quo. Wyoming businesses and communities who fear labor shortages could hire workers without prior industry experience and train them to meet standard requirements for employment. The practice of hiring less experienced local individuals for lower wages may be a better economic strategy than recruiting more experienced workers from outside the state. On-going studies using employer wage records to track the sources of labor supply for coal bed methane development, for example, have shown that many laborers have work experience in Retail Trade or food services immediately prior to securing their jobs in the Mining industry.⁷

From a job seekers perspective, overrepresentation in some occupational groups may also signify a source of secondary employment or a safety net when primary seasonal employment (e.g., substitute teaching, skiing instruction) ends. This is a practice which presumably helps retain seasonal workers in Wyoming.

Though there is a perception that Wyoming has too few good jobs, perhaps a more accurate statement would be that the higher concentration of employment within fewer occupational groups limits the scope, diversity, and attractiveness of available career paths that are more plentiful elsewhere. For example, one could imagine a scenario where workers begin employment in food preparation and serving related occupations; then transition to a job or a series of jobs in sales and related occupations; and then move into a higher paying job in business and financial services occupations. In Colorado, South Dakota, and Utah, sales and related occupations exceed 11.0 percent of the work force (Wyoming has 9.4%). Business and financial operations occupations, too, hold a significantly larger proportion of workers than in Wyoming. Both the scale of employment and diversity of opportunities in these states offer workers a broader platform for moving among occupations within an occupational group, moving between occupational groups, and perhaps more avenues to eventually enter higher paying industries.

The degree to which Wyoming employers, particularly small employers, have been successful in keeping their highly skilled labor continuously employed is a topic for future quantitative study. A particularly interesting inquiry would be to examine through interstate, administrative, and demographic databases how strategies for the retention of skilled labor may unintentionally limit career growth opportunities for younger or less experienced workers. Until that time, employers and economic developers can use the analysis of OES occupational distributions as one more tool for assessing Wyoming’s bid for skilled labor in light of the competition.

¹Mark Harris, “Identifying Potential Living-Wage Employment Growth Opportunities in Wyoming,” Wyoming Labor Force Trends, May 2003, pp. 1-11.

²Carol Toups, “One-Third of Wyoming Employment in Small Business,” Wyoming Labor Force Trends, January 1996, pp. 1-4.

³Wyoming Department of Employment, Research & Planning, Where Are the Jobs? What Do They Pay?: 2000 Annual Covered Employment and Wages, August 2002, p. 27.

⁴Twenty-two major occupational groups are described in the Standard Occupational Classification Manual (2000).

⁵Wyoming Department of Employment, Research and Planning, Employment Outlook: 2010, April 2003, p. xii.

⁶Approximately 85-90 percent of all workers in Wyoming are covered by Unemployment Insurance (UI). Some exceptions include the self-employed and many agricultural workers.

⁷William Glover, Research Analyst, Research & Planning, Wyoming Department of Employment, personal interview, May 30, 2003. Interview related data on Wyoming industry origins represented by “Figure 8: Individuals Transitioning from 1999 to 2000 from Another Industry or State to Wyoming’s Oil and Gas Extraction Industry by State of Origin,” data and presentation for the Powder River Coalbed Methane Information Council, (June 7, 2002), http://doe.state .wy.us/lmi/w_r_research/CBM_Presentation6_07_2002.pdf , May 30, 2003.

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