Retention of Wyoming's Labor Force: Holding on to Households
by: Craig Radden Henderson, One Stop Program Supervisor and Sara Saulcy, Economist
tables and figures by: Susan J. Murray, Administrative Specialist

"Labor market attachment may hinge on whether or not two or more members of the household have similar access to meaningful, competitively compensated job opportunities."

L abor market analysis has traditionally considered the individual as the focus of understanding national and regional labor market experiences for different demographic groups. An alternative is to consider the household as the focus. By focusing on the household, our analysis emphasizes the importance of work opportunities for all demographic segments, even though the available data make this task difficult.¹  Using selected economic indicators (e.g., labor force growth rate, population growth, average annual pay, median weekly earnings), we evaluate differences in labor force attachment between individuals and households, and differences between genders. Our analysis is predicated on the assumption that decisions to stay and work in Wyoming are household or family decisions rather than decisions by individuals. Our analysis suggests that Wyoming’s ability to retain and develop its current skilled labor force may require expanding existing employment opportunities for secondary wage earners, but most notably to include broadening the industrial reach of female employees beyond Retail Trade, Services and Government.

A number of factors contribute to the chilly climate for creating new opportunities for secondary wage earners within households. Among them are
• Historic and cultural patterns of industrial employment in local labor markets;
• Occupational projections which indicate the limited influence of higher education as a remedy to the state’s gender gap with respect to wages; and
• The limited availability in the private sector of benefit packages comparable with public sector employment, most particularly in Retail Trade and Services.

National Measures of Economic Performance – Labor Force Growth

One standard for measuring economic performance of a state's labor market is the labor force growth rate.²  As shown in Table 1, Wyoming’s rate of growth over the past decade equals the national average of 11.0 percent, reflecting an increase in Wyoming’s civilian labor force from 236,000 in 1990 to 262,000 in 1999. Wyoming ranks 26th among the states in terms of growth, which could be considered modest and stable. However, all six neighboring states have exceeded Wyoming’s growth over the decade.

Labor Force Relative to Population Growth

A second measure of economic well-being is how the labor force is growing relative to overall population growth. Based on decennial population data for 2000 and Table 1, the labor force grew faster than the population in almost half of all states as a result of baby boom generation growth and participation in the labor force. Though Wyoming’s labor force has grown by 11.0 percent, the state’s population increased at a lower rate, 8.9 percent. Wyoming has a maturing baby boom generation, almost all of whom participate in the labor market.³

  At both ends of the labor market’s age scale, for workers in their early twenties and those approaching traditional retirement age, migration from the state may occur for a multitude of noneconomic or job-related reasons (i.e., marriage, higher education, career paths, proximity to family, climate, health reasons). However, for those members of working households who want to continue to live and work in Wyoming, or who seek to move to Wyoming from elsewhere, labor market attachment may hinge on whether or not two or more members of the household have similar access to meaningful, competitively compensated job opportunities within commuting distance of their homes. Recent population trends suggest that Wyoming employers must increasingly rely on the current stock of locally available labor to fulfill their needs.

Using National Data Sources to Compare States’ Abilities to Attract and Retain Labor

Table 2 is comprised of two discrete types of data. From the tax records of establishments covered by Unemployment Insurance (UI), the table shows the average annual pay per job for full- and part-time labor by state. Employers covered by UI are required to report employment and pay for each job filled by a worker during a given quarter. Because individuals may work for more than one establishment, average annual pay measures average wages per job, not the total earnings of individuals. Table 2 also contains estimated median weekly earnings of full-time workers (only) for both sexes, and for men and women separately, by state. These estimates are derived from the Current Population Survey (CPS).⁴

Importantly, though Table 2 compares data from these two unique sources, the difference between data based on Wyoming UI tax files, which as discussed earlier reflects all full- and part-time wage earners covered by UI, and data obtained through the CPS is that this presentation of CPS data include only earnings for individuals working full-time.

UI Tax data allow Research & Planning to examine wages as a partial proxy for the competitive position of the states in attracting and retaining labor. For example, Table 2 provides a state comparison of average annual pay. The averages reflect payroll data gathered from establishment tax records, which are reported to their respective state UI tax agencies. Average annual pay reflects the wages of all jobs worked whether full- or part-time. In 1999, the average annual pay per job in Wyoming was $25,639. Wyoming ranked 45th among the 50 states. Wyoming’s rank was similar to several regional neighbors including Montana (50th), North Dakota (49th) and South Dakota (48th). (Data for these three states are shown in bold in Table 2.)

As shown in Table 2, Wyoming, the Dakotas and Montana also ranked at comparable levels when using household data showing median weekly earnings for women. South Dakota ranked 43rd, followed by Wyoming (44th), North Dakota (48th) and Montana (50th).

Using National Data to Form a Context for Understanding Earnings Differences by Gender

The low ranking of Wyoming’s average annual wage as shown in Table 2, however, disguises a more complex pattern of labor market attachment and earnings power between male and female workers. For example, earnings differences by gender, as shown in Table 2, appear especially acute. From data collected through the CPS,  median weekly earnings in 1999 for all full-time Wyoming workers (both genders) were $500. Considered separately, females working full-time in Wyoming earned $390 per week compared to earnings by males of $623. When the levels of female earnings were ranked by state, Wyoming placed 44th in the nation. With respect to male earnings, Wyoming ranked 19th, just above California. In fact, median weekly earnings for males working at full-time jobs in Wyoming slightly exceeded the national average of $618.

To put median household weekly earnings estimates into a regional perspective, we again consider the rankings of Montana, North Dakota and South Dakota in comparison to Wyoming. For both sexes, and men and women separately, Montana, North Dakota and South Dakota are very similar to each other in earnings. These three states rank between 43rd and 50th in all three demographic categories for earnings in Table 2. Moreover, each of these states’ rankings are roughly equivalent to the state’s respective ranking of average annual pay (recall that this tax count reflects both full- and part-time workers). In contrast, Wyoming’s rankings for both sexes, and women and men separately, are not uniform. Men’s earnings are ranked significantly higher. Wyoming’s average wage ranking increases from 45th to 33rd when only full-time workers are observed, while the rankings of Montana and the Dakotas remain at the same low level. To explain this difference, we need to consider whether men and women have similar access to full-time employment opportunities. Nationally, we know that approximately 10 percent of men and 25 percent of women work part-time.⁵

Baseline research on labor market attachment using Wyoming wage records showed that in 1998 only 43.7 percent of all Wyoming workers were classified as steady workers with a single employer. ⁶  Gathered from other Wyoming administrative databases and matched to the UI Wage Records database, demographic information compiled on steady workers with a single employer showed that in 1998, 51.9 percent were male and 49.0 percent were female. ⁷  Thus, no significant gender difference exists in Wyoming within this category of labor attachment.

Relationship between Household Income and Establishment Average Pay

In Figure 1, a scatterplot shows the relationship between estimated median household income from the household survey and establishment average pay by state based on data from Table 2. States cluster approximately in a diagonal line, indicating a strong positive relationship between the pay and income variables. We interpret Figure 1 to mean that average annual pay is a strong predictor of household income. We cannot rule out, however, that this relationship may be related to cost-of-living factors.

Income itself reflects the industries in which members of the labor force participate. Variations between the states reflect differences in the industrial composition of state economies, the number of persons per household who find work, and the amounts and types of non wage and salary income. For instance, in Wyoming the five industries with the largest payroll share, based on the average of quarterly earnings in 1999, were 1) Government and Government Enterprises,⁸ 2) Services, 3) Mining, 4) Retail Trade and 5) Transportation, Communications, & Public Utilities (TCPU).⁹  In comparison, the five industries with the largest payroll share in 1999 in Connecticut (representing the highest relative position and designated in bold in Figure 1) were 1) Manufacturing, 2) Finance, Insurance, & Real Estate (FIRE), 3) Government and Government Enterprises, 4) Retail Trade and 5) Wholesale Trade. New Mexico which occupies a position below the diagonal has among its five industries with the largest payroll share in 1999: 1) Services, 2) Government, 3) Retail Trade, 4) Manufacturing and 5) Construction. The differences in the primary industries of Wyoming, Connecticut and New Mexico (shown in blue) as well as differences in industrial composition in other states, help to explain the relative position of states in Figure 1.

Using Administrative Databases to Characterize Attachment to the Wyoming Labor Market

Wyoming’s Wage Records database, an administrative database used to calculate Unemployment Insurance benefits, in combination with demographic data from other administrative databases (e.g., driver’s license database), permits us to characterize labor supply in more detail. Unlike national surveys such as the CPS, which base estimates on a sample of physical locations in each state, Wage Records reflect population working in the state regardless of where they may reside. Figures 2 through 6 represent examples of Wage Records research.

Figure 2 shows the industrial distribution of Wyoming employment in 1999 and provides a baseline for comparing employment distributions by gender and age. As shown in Figure 2, two industries (Services and Retail Trade) accounted for nearly half of all employment in the state. Government (including school districts), accounted for another 18 percent. Previous articles in Wyoming Labor Force Trends have shown how the higher paying industries (e.g., Mining and TCPU) have traditionally employed significantly higher proportions of male than female workers. ¹⁰  These industries also, in general, retain their workers longer than either Services or Retail Trade. Therefore, employee mobility into higher paying jobs, when it may require a change from one industry to another, is limited by comparatively fewer opportunities created through attrition and turnover in the higher paying industries.

Though we do not have demographic data by industry for Montana and the Dakotas, we expect that Wyoming has a higher combined proportion of full-time employment of males in the often closely linked industries of Mining, Construction and TCPU than Montana or the Dakotas. Partly, differences in male earnings between Wyoming, Montana and the Dakotas reflect the different industrial distribution within these states. In addition, the extractive industries, which have exerted a historical and cultural influence in Wyoming, continue to assume a more central role in Wyoming’s economy than in neighboring states. Furthermore, extractive industries have traditionally employed greater numbers of male employees than female employees. This helps explain the heightened earnings differential between males and females in Wyoming.

In comparison, based on 1999 UI employment data, individuals working in Montana and the Dakotas are more likely than Wyoming workers to be employed in Manufacturing. ¹¹  Although the distribution of statewide employment in Retail Trade and Services in these states is proportional to Wyoming’s, ostensibly larger proportions of full-time employees in these other states may be found in industries which traditionally pay lower wages than in Mining. For example, while Mining ranked as the third most significant industry in Wyoming in terms of average quarterly earnings in 1999, in Montana and North Dakota, Mining ranked ninth and in South Dakota, tenth.¹²

Figures 3 through 6 show how employment opportunities for individuals are distributed differently among selected gender and age categories. For example, employment opportunities for youth follow a simple pattern of industrial distribution, but the distribution was more complex for mature men. The employment distribution of mature women is much less complex than for mature men. Differences in earnings may reflect the age of workers. In labor market research, age often (but not always) reflects additional years of work experience. Figure 3 shows that in 1998, two-thirds of all males, ages 20-24, were employed in three industries, Retail Trade (28%), Construction (20%) and Services (19%). Typically, entry-level positions in these industries do not require high levels of education or experience, and higher turnover rates in these industries create opportunities. However, as indicated by Figure 5, only about one-third of males, ages 45-54, held primary jobs in these same three industries (Retail Trade, 9%; Construction 12%; and Services 13%). Additionally, approximately twice as many males, ages 45-54, worked in Mining (16%) than did males, ages 20-24. Nearly three times as many males, ages 45-54 than ages 20-24 years worked in Finance, Insurance, & Real Estate (FIRE — 3%); Transportation, Communications, & Public Utilities (TCPU — 10%); and Government (28%). This pattern suggests that males, as they age, are able to transfer skills and prior years of experience in Construction, Services or Retail Trade to more secure jobs with single employers in industries that are generally considered higher paying.

The 1998 Wage Records data show that the distribution of females, ages 20-24 and 45-54, among industries did not differ much when compared to males in the same age groups. Figure 4 shows that nearly 75 percent of all females, ages 20-24, worked in either Retail Trade (40%) or Services (32%). Another 13 percent worked in Government. Figure 6 shows that a comparable 82 percent of females, ages 45-54, were found in these same three industries. The difference is that only 16 percent of women, ages 45-54, were employed in Retail Trade, rather than 40 percent of women, ages 20-24, in the same sector. If in their youth, significant numbers of these mature women had worked in Retail Trade or Services, they appear to have translated those earlier years of work experience into jobs or careers in Wyoming’s public sector. Indeed, Figure 6 shows that 41 percent of females, ages 45-54, were found working in Government (including school districts). A comparison of Figures 4 and 6 shows that only Government appears to offer a significant number of women the opportunity to transfer their prior experience and skills between industries. This apparent lack of industrial mobility for women (as an aggregate group) over time may also contribute to the earnings divide separating men and women. In the absence of access to full-time job opportunities in the public sector, the difference between male and female earnings would very likely be much higher.

Recognizing Household Needs in Employee Recruitment and Economic Development

The preceding analysis suggests that employee recruitment and economic development should consider the needs of households. For those Wyoming workers who choose to be married or who are otherwise dependent on another’s income, attachment to a labor market is probably more likely to reflect a household strategy than an individual’s preference. Likewise, an employer or economic developer’s attempt to attract skilled workers must recognize that for every worker they want to attract and retain, the local labor market may, in time, need to provide or create two or more suitable opportunities for employment. In Wyoming, the primary wage earner in a household, often a male, working in a smaller and less diverse labor market, usually must weigh the decision to continue working against the comparatively restricted employment opportunities available to a spouse or other family member.

Potentially Limited Role for Education and Training in Labor Market Attachment

One response to comparatively lower earnings for women has been increasingly to emphasize education and training.¹³  This strategy, however, must be viewed in the context of projected occupational growth for the period 1998 to 2008. Current projections show that only nine of the 50 occupations estimated to make up the largest share of new jobs in Wyoming require an Associate’s degree or higher. ¹⁴  Therefore, if training-related employment is not available locally, the expectations for higher wages, especially to recover the costs associated with an investment in higher education or other technical training of a spouse, may only increase the pressure on a household to relocate. Many households must consider the alternative costs and benefits associated with a family member commuting to a job, relocation elsewhere within the state, securing acceptable employment unrelated to training, or migration to higher wage areas outside Wyoming.

Government Employment and Household Attachment to the Wyoming Labor Market

Preliminary research using data from Wyoming’s institutions of higher education has shown that a significant proportion of those who do earn degrees secure employment in Government. State and Local Government agencies, including school districts, employ people in most communities. Often they are the among the largest employers in a given area. Because of their size, they offer many employees, particularly females, internal opportunities for full-time career advancement that may not be available in smaller firms. Additionally, they usually provide women and their families a safety net with respect to health insurance, paid leave and other benefits that may exceed the total compensation package offered by smaller, private-sector firms.¹⁵  If the provision of health insurance or other benefits meets a household need not otherwise being met by the primary wage earner’s employer, this fact alone may direct the employment decision of the secondary wage earner. Also, this may be one reason why retention rates for Government employment, as a whole, are higher than several other industries.

Often patterns of labor attachment reflect household strategies aimed at attaining an acceptable standard of living. The availability of suitable employment at competitive rates of compensation, including the provision of benefits, is a key condition in deciding whether to stay or leave a labor market.

1 Data available from the federal statistical system, which focuses on the individual is inadequate for studying entire households; however, it is the only system that allows for interstate comparison.

2 Labor force growth rate refers to the annual percentage change that occurs in the total number of both employed persons (including both full- and part-time workers) and unemployed persons who were actively seeking employment. Not included in the labor force figures published by the U.S. Bureau of Labor Statistics are those persons who are not currently working and have not looked for work during the four weeks prior to the reference period. These individuals may not be looking for work because of child-care problems, transportation problems or discouragement over job prospects.

3 Wyoming Department of Employment, Research & Planning, Outlook 2000: Detailed Occupational Projections and Labor Supply, October 2000, p. 33. In 1998, approximately 109,000 workers between the ages of 35-54 were found working in Wyoming, accounting for about one-third of Wyoming’s workforce.

4 The Current Population Survey (CPS) is a household survey conducted by the U.S. Bureau of the Census for the Bureau of Labor Statistics.

5 U.S. Department of Labor, Bureau of Labor Statistics, "Table A-6: Employed and Unemployed Full- and Part-Time Workers by Sex and Age, Seasonally Adjusted," Employment and Earnings, December 2000, p. 18. Rounded percentages were computed from monthly data.

6 Wyoming Department of Employment, Research & Planning, Wyoming Wage Records 1992-1998: A Baseline Study, November 2000, p. 66.

7 Wyoming Department of Employment, Research & Planning, Wyoming Wage Records 1992-1998: A Baseline Study, p. 66.

8 Government Enterprises include federal government.

9 U.S. Department of Commerce, Bureau of Economic Analysis, "Regional Accounts Data, State Quarterly Personal Income," 1999, http://www.bea.doc.gov/bea/regional/sqpi/ (January 31, 2001).

10 Rich Peters, "The Importance of Major Industry to Wyoming’s Gender Pay Gap, Part One," Wyoming Labor Force Trends, July 2000, pp. 1-5. This article also cites most prior research on the subject of gender and wages published in Wyoming Labor Force Trends.

11 U.S. Bureau of Labor Statistics, "State at a Glance, Nonfarm Wage and Salary Employment, State and Area, Employment Hours and Earnings: 1991-1999," http://www.bls.gov/eag/eag.map.htm (January 26, 2001).

12 U.S. Department of Commerce.

13 Research & Planning expects to publish an article this spring, jointly written with Casper College personnel, that highlights an outcomes-based approach to measuring labor market performance of graduates, including using employer satisfaction surveys as a tool for responding to new labor market needs and improving instructional programs.

14 Wyoming Department of Employment, Research & Planning, Table 3-8: Wyoming Projections for All Occupations, Net and Percent Employment Change, 1998-2008, Outlook 2000: Detailed Occupational Projections and Labor Supply, October 2000, Appendix 1.

15 Carola Cowan, "Employee Benefits Survey: Compensation Revisited," Wyoming Labor Force Trends, August 2000, pp. 1-8. This article also cites Wyoming Department of Employment, Research & Planning, Employee Benefits Survey: A Pilot Study for Wyoming, July 1999.

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