Understanding How Commuting Flows and Job Losses in Other States Could Affect Wyoming’s Unemployment Rate
What is the potential that Wyoming’s unemployment rate could be affected by job losses in other states as a result of the recent decline in oil prices? The Local Area Unemployment Statistics (LAUS) program counts people as unemployed by place of residence. In some cases people may work in one state but live in another. For example, someone residing in Wyoming may work for an employer in Colorado. If she loses her job, she would be counted as unemployed in Wyoming even though the job was lost in Colorado. One of the important inputs in developing estimates of the number of unemployed is the statistical use of administrative data from the Unemployment Insurance (UI) program.
This article examines commuting patterns between Wyoming and several other states, and looks at those industries that employ Wyoming residents who work out of state. It outlines how unemployment insurance claims data are exchanged between states and how those data are used in developing monthly unemployment rate estimates.
In February 2015, an estimated 13,940 Wyoming residents were unemployed (4.6% of the labor force). The number of Wyoming residents commuting to work in other states is large enough to potentially have an impact on Wyoming’s unemployment rate. Previous research has shown that one-third of individuals who collect Wyoming Unemployment Insurance benefits reside in other states (Harris, 2014).
Additionally, since all Wyoming Workforce Centers are required to provide reemployment services to UI claimants, regardless of where they lost their jobs, layoffs in other states could result in a greater workload for the Department of Workforce Services (Cates, 2015).
Based on individual situations, as well as the relative strength of state and local economies, Wyoming could see net outmigration, or net in-migration as conditions change. If jobs are plentiful in a border state, residents may choose to commute to work there, rather than remaining unemployed. Relative differences in state economies can be driven by changes in the national economy. Wyoming, for example, is heavily dependent on its natural resources & mining sector (including oil & gas). When commodity prices fall, this negatively affects our economy. Other states, however, may be more closely correlated with the national business cycle, and may, in fact, benefit from lower oil prices.
Research of this kind would not be possible without the cooperation of many states. Wyoming has memorandums of understanding (MOUs) with 11 states (Alaska, Colorado, Idaho, Montana, Nebraska, New Mexico, Ohio, Oklahoma, South Dakota, Texas, and Utah; see Map, page 12). We sincerely thank them for sharing their data and acknowledge their assistance.
The figures in this article were developed by matching individuals (based on their social security number) with their employers (based on Unemployment Insurance number). Some individuals could be included as working in multiple states, or as having multiple employers in the same state. Wyoming residents are defined as “individuals [with] a Wyoming-issued driver’s license or at least four quarters of work history in Wyoming” (Jones, 2002).
Commuting Patterns
Any analysis of labor market trends should take into account what happens beyond Wyoming’s borders. As one labor market analyst noted, “In a mobile environment, labor markets do not respect county or state boundaries” (Leonard 2010).
This section includes an analysis of commuting patterns into border and non-border partner states, or those states with labor market information (LMI) offices with which R&P has data-sharing agreements. The most recent four quarters of comprehensive data were used for this analysis: 2012Q3 to 2013Q2 for border states, and 2013Q2 to 2014Q1 for non-border states. A comprehensive table with interstate commuting data from 2010Q1 to 2014Q1 is available at http://doe.state.wy.us/LMI/commute.htm.
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Figure 1 shows the number of Wyoming residents who commute into border states. By far, the largest number work in Colorado. From third quarter 2012 to second quarter 2013, this number ranged from 7,772 to 8,447. Those who are familiar with Wyoming’s geography should not be surprised by these results. Wyoming’s most populous county, Laramie County, borders Colorado and there are many jobs within easy commuting distance in northern Colorado. For example, Fort Collins is 47 miles south of Cheyenne via Interstate 25.
As Figure 1 shows, Utah ranks a distant second as a commuting destination for Wyoming residents. Approximately 4,300 people commuted from Wyoming to Utah in second quarter 2013. Salt Lake City is located 82 miles from Evanston, and Interstate 80 winds through several canyons along the way, making commuting more challenging, especially in the winter.
Nearly as many Wyoming residents commute to Montana as Utah (approximately 4,200 individuals in third quarter 2012). Wyoming shares a long border with Montana and the city of Sheridan is located only about 25 miles from the Montana border.
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Figure 2 shows the number of Wyoming commuters into border states by industry for third quarter 2012 to second quarter 2013. Retail trade accounted for the largest number of commuters (more than 2,500 in each quarter). It was followed by accommodation & food services (approximately 2,500), health care & social assistance (nearly 2,500), and construction (approximately 2,000). Retail trade, accommodation & food services, and health care & social assistance are some of the largest industries in Wyoming as well. More than 1,500 Wyoming residents commuted to mining (including oil & gas) jobs in other states. With the recent decline in oil prices, it would not be surprising if some of those workers in the oil & gas sector would be laid off.
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The number of Wyoming commuters into selected non-border states is illustrated in Figure 3. The data in this figure are limited by the fact that Wyoming does not have data sharing agreements with every state. In addition to border states, data are currently available for Alaska, Ohio, New Mexico, and Texas. Given those limitations, Texas stands out as a destination for Wyoming commuters, with approximately 3,400 individuals working there. It would seem likely that this is related to the sheer size of Texas (2014 estimated population of 27 million; US Census Bureau, 2014) as compared to many other states. Research & Planning has added a table to its website showing the number of commuters by state and by industry for each quarter from 2010 to 2014 (http://doe.state.wy.us/lmi/commute/2014/table.htm). The table is further broken out by whether workers held Wyoming Drivers’ licenses (Research & Planning, 2015). That table shows that of the approximately 3,500 Wyoming residents working in Texas, 594 worked in mining and 419 worked in construction in first quarter 2014.
Mining and construction are two industries in which substantial job losses were seen in 2009-2010. In contrast to those workers holding Wyoming drivers’ licenses working in other states, there were also a substantial number of people residing in other states who worked in Wyoming, and between 2005 and 2012, 60% of those who left Wyoming’s labor market were nonresidents (Harris, 2014). Part of the exodus of nonresidents may have been related to the rapid expansion and contraction of the coalbed methane industry during the early 2000’s in Wyoming. For an in-depth analysis of Wyoming residents and use of the Unemployment Insurance system, please see http://doe.state.wy.us/LMI/trends/1214/toc.htm.
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Figure 4 shows the industries where Wyoming commuters are working in selected non-border states. Comparing Figure 4 to Figure 2 reveals a quite different pattern of employment by industry for border state and non-border state commuters. In non-border states, the largest number of commuters was found working in mining (including oil & gas; approximately 900 individuals). The high wages typical in the mining sector may help explain why workers would commute long distances. All else being equal, it is expected that lower oil prices will result in fewer jobs in the mining sector.
Approximately 600 Wyoming residents worked construction jobs in non-border states. Many construction jobs are temporary, so in order to maintain consistent employment, workers may be required to accept jobs far from home. The effect of oil prices on construction employment could be mixed. In oil-dependent states, a certain amount of construction activity is related to oil & gas development, such as building pipelines and natural gas processing plants. However, in other states, and likely the nation as a whole, lower oil prices could boost construction activity and associated employment.
The third largest sector employing Wyoming residents in non-border states was accommodation & food services (approximately 500 individuals). Interestingly, low oil prices could boost tourist activity, and therefore cause employment to increase and possibly result in more Wyoming residents commuting to work in this sector. Lower gasoline prices not only make it less expensive to travel, but they also result in lower monthly expenses for households, freeing up funds for extras, such as vacations.
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Figure 5 provides more detail than earlier graphs. It focuses on Wyoming residents who worked in Colorado from first quarter 2010 to first quarter 2014. One noteworthy trend is that the percentage of Wyoming residents commuting to construction jobs in Colorado increased beginning in first quarter 2012. This is consistent with recent data showing that construction is one of the fastest growing sectors in Colorado. A high percentage of commuters also work in retail trade, health care & social assistance, and mining.
In contrast, Wyoming residents working in South Dakota are much more likely to be found working in accommodation & food services (see Figure 6, page 17). The Black Hills region of South Dakota, which includes such attractions as Mount Rushmore, is located near Wyoming’s eastern border. The data suggest that many Wyoming residents might work seasonal jobs in South Dakota’s tourism industry (both in accommodation & food services and in retail trade).
The Local Area
Unemployment
Statistics Program
The Local Area Unemployment Statistics (LAUS) program counts people as unemployed by place of residence. Part of the estimation process involves a series of data exchanges. Every week each state receives a file with all interstate unemployment insurance claims for all states from the U.S. Department of Labor. Additionally, Wyoming has access to driver’s license records and has data sharing agreements with other states. This gives R&P access to administrative records for people with Wyoming driver’s licenses who work out of state. Due to the interstate claims we can also determine if these people become unemployed. People with ties to Wyoming may decide to return here once they become unemployed in another state. For unemployment statistics purposes these people are then counted as unemployed in Wyoming even though their job was lost in another state.
What if oil prices remain low and layoffs in the oil & gas industry continue? The data show that more than 1,500 Wyoming residents commute to mining jobs in border states, and an additional 900 residents work mining jobs in non-border states. This means that in the mining sector alone, approximately 2,400 Wyoming residents could be affected. Unless they find other jobs, these individuals could be counted among Wyoming’s unemployed and it is possible that the unemployment rate may rise more rapidly than job losses in Wyoming would suggest.
References
Cates. T. (personal communication, March 20, 2015).
Harris, P. (2014). The recent labor market downturn as a natural experiment, part 1: Unemployment Insurance (UI) claimant labor market behavior: length of benefit collection and the likelihood of exiting the labor market. Wyoming Labor Force Trends, 51(11). Retrieved March 19, 2015 from http://doe.state.wy.us/LMI/trends/1114/a1.htm
Jones, S. (2002). “Defining residency for the Wyoming workforce.” Wyoming Labor Force Trends, 39(11). Retrieved May 23, 2013, from http://doe.state.wy.us/LMI/1102/a1.htm
Leonard, D. (2010). Commuting and unemployment insurance claims: Evidence from Natrona County. Wyoming Labor Force Trends, 47(7). Retrieved February 27, 2015, from http://doe.state.wy.us/LMI/0710/a8.htm
Research & Planning, Wyoming Department of Workforce Services. Selected States Commuters by Industry and Quarter. Retrieved March 19, 2015 from http://doe.state.wy.us/LMI/commute/2014/table.htm
U.S. Census Bureau. Intercensal Population Estimates, State Totals. Retrieved February 27, 2015 from http://www.census.gov/popest/data/state/totals/2014/index.html