Wyoming UI Claims Reach
22-Year High
in First Quarter; Payments Hit All-Time High
| Term | Definition |
|---|---|
| Initial Claims (or New Claims) |
Persons who just lost their jobs and applied for UI benefits (best indicator of new layoffs although some unemployed workers choose not to apply for UI benefits) |
| Continued Claims (or Weeks Claimed) |
Number of weeks claimed for UI benefits. Each person may claim more than one week of benefits during a specific time period. |
| Benefit Recipients | Persons who are actually receiving UI benefits. Not everyone who applied for UI benefits is eligible for it since there are some monetary and nonmonetary requirements (Wen, 2004). |
| Regular UI Benefits | Benefits to which a UI claimant was entitled based on his or her prelayoff wages and was paid from state UI Trust Fund. |
| Wyoming Liable | Claimant's benefit is paid by Wyoming state UI Trust Fund due to his/her majority prelayoff wages made from work done in Wyoming. |
| Benefit Exhaustees | Person who has collected all of his or her entitled regular UI benefits. |
All industries experienced large increases in the number of new Unemployment Insurance (UI) claims and benefit recipients. These increases indicate the recession is now impacting the state. Wyoming is not isolated from the modern, globalized economy, especially due to its ties to the world energy market. Fewer re-employment opportunities may exist in Wyoming’s labor market in 2009 compared with previous years. Fortunately, Wyoming’s UI trust fund is not facing solvency issues in the near future, as many states are.
The U.S. economy has been in recession for more than a year now. Large job reductions and mass layoffs have occurred month after month in many states. By mid-April 2009, the number of people remaining on unemployment insurance (UI) benefits exceeded 6 million, the highest on government records dating from 1967 (Associated Press, 2009). Several states’ UI trust funds have run out of money, forcing the states to borrow millions or billions of dollars from the federal government to pay unemployed workers’ UI benefits. Meanwhile, the nation’s unemployment rate reached 8.5% in March (Bureau of Labor Statistics, 2009). Until recently, Wyoming has not been affected as much as other states by this deep, long-lasting recession. However, Wyoming’s good fortune could not last indefinitely, especially in a modern, globalized economy. Although Wyoming’s unemployment rate of 4.5% in March 2009 still ranked as the second lowest in the nation, both its first quarter initial UI claims (14,803) and continued claims (103,502) reached 22 year-highs (see Figure 1). Meanwhile, the Wyoming Department of Employment paid more than $35.8 million in unemployment insurance benefits for this quarter, the largest quarterly payment since 1981Q3 (see Figure 2).
A total of 14,803 Wyoming workers who became unemployed in first quarter 2009 (2009Q1) applied for UI benefits, more than double that of 2008Q1 (7,007 initial claims; see Table 1). This number also surpassed the last two national recession-related levels in 1991Q4 and 2002Q4 of 11,126 and 9,806 claims, respectively. The initial claims level in 2009Q1 is a 22-year high for quarterly claims. The total number of UI recipients (15,570) in 2009Q1 was also more than double the previous year’s level (7,594 in 2008Q1; see Table 2). Additionally, there were 1,024 unemployed workers who exhausted their regular UI benefits and were collecting Emergency Unemployment Compensation (Department of Labor, Employment & Training Administration, 2009a), which was funded by the federal government. In this article, the focus is on regular Wyoming liable UI claims and benefits. No reimbursable or extended UI programs are evaluated here because they are not directly related to the state UI trust fund.
Industry
All industries showed double-digit increases in initial claims from 2008Q1 to 2009Q1. Mining experienced the largest increase at 401.0%, from 606 initial claims in 2008Q1 to 3,036 in 2009Q1. The majority (78.2%) of this increase was from two mining subsectors: support activities for oil & gas operations (49.5% of the total increase, or 1,202 initial claims) and drilling oil & gas wells (28.7%, or 699). Seven other industries also doubled or tripled their initial claims, including real estate & rental & leasing (241.1% increase, from 56 to 191), wholesale trade (185.3%, from 116 to 331), and professional & technical services (173.0%, from 122 to 333). The two industries responsible for the most layoffs were construction (4,096, or 27.7% of the total) and mining (3,036, or 20.5%).
Nonresident workers filed 16.4% of the total initial claims in 2009Q1, compared to 12.6% in 2008Q1. More than half (56.6%) of the nonclassified industry initial claims were from nonresident workers. The proportion of nonresident initial claims varies widely by industry. For example, it was 22.6% in accommodation & food services, 16.6% in mining, and 15.9% in professional & technical services, but only 3.2% in public administration and 4.1% in health care & social assistance.
The number of UI benefit recipients also experienced double- or triple-digit increases across all industries (see Table 2). Mining led all industries with a 393.6% increase, from 501 individuals collecting UI benefits in 2008Q1 to 2,473 in 2009Q1. In nearly half of all industries, the number of UI recipients was double the previous year’s level.
Among recipients, 1,664 individuals exhausted their regular UI benefits in 2009Q1, an 80.9% increase from 2008Q1. The statewide UI exhaustion rate (the number of exhaustees divided by the number of UI recipients) was relatively low at only 10.7% in 2009Q1, primarily because a large number of UI recipients have just started to collect benefits (the denominator grew faster than the nominator in the formula of exhaustion rate (Wen, September 2008). If the economy continues to worsen, the exhaustion rate is expected to grow later in the year.
The large rise in UI exhaustees (in addition to the above-mentioned workers who were already on the EUC program) indicate that reemployment opportunities in Wyoming’s labor market were declining in 2009Q1 compared with the previous year. February’s current employment statistics data show that the state nonagricultural employment grew at its slowest pace (1.5%) since October 2004 (Bullard, April 2009). Many Wyoming employers may not be confident enough about the future to hire additional workers or expand their businesses. According to USA Today, “Nearly three-quarters of CEOs in the Business Roundtable expect to cut workers in the next six months” (Hagenbaugh, 2009). Another possibility could be that more people may have come from other states to compete with Wyoming workers for finite job opportunities.
County-Level UI Statistics
Some UI claimants live in one county but work for an employer in another county. The following is based on the claimant’s county of residence rather than the employer’s county because one person could have worked for several different employers in different counties in a specific time period. This also helps to identify the labor supply each county has.
The largest number of people who lost jobs in 2009Q1 were from Wyoming’s most populous counties: Natrona County (1,965 or 13.3% of total) and Laramie County (1,723 or 11.6%; see Table 3). Employment is also highest in these counties (Bullard, 2009). Other counties with high initial claims were Campbell (1,135 or 7.7%) and Sweetwater (1,046 or 7.1%). However, the most new claims occurred among out-of-state workers (2,435 or 16.4% of total). More than half of all counties experienced triple-digit gains. The remainder experienced double-digit increases, with the exception of Goshen County. Initial claims rose by 1,550 for out-of-state workers and by 1,071 for Natrona County from 2008Q1 to 2009Q1, the highest numeric increases across all areas.
The lowest percentage increase in UI recipients was in Washakie County (9.8%; see Table 4). Consistent with initial claims, Sublette and Teton counties showed the highest over-the-year percentage increases in UI recipients (271.7% and 270.5%, respectively), followed by Sweetwater (177.4%) and Campbell (172.0%). The highest percentages of UI recipients were from out of state and Laramie and Natrona counties (17.2%, 13.2%, and 11.3% respectively).
The number of UI benefit exhaustees rose in all counties except Johnson. However, the exhaustion rate fell in most counties, for the same reason mentioned above: a large proportion of UI recipients were new layoffs and just beginning to collect UI benefits.
UI Benefit Expenses and Trust Fund
The Wyoming Department of Employment (DOE) paid a total of $35.8 million in regular UI benefits to unemployed workers in 2009Q1, the highest on quarterly payment records since 1981Q3. This amount was a 140.3% increase from the 2008Q1 level of $14.9 million. There were three reasons for the increase in UI benefit expenses. One was the steep rise in UI claims. The number of continued claims (or weeks claimed) for benefits in 2009Q1 was 103,502, nearly double the previous year’s level of 52,616 weeks in 2008Q1, a 96.7% increase. This level was last seen in 1987Q1.
The second reason was the increase in average weekly
benefit amount (AWBA), which mainly resulted from wage increases over
the years. How much of a weekly UI benefit an individual can receive
is based on his or her pre-layoff wages (Wen, 2004). In 1987, the AWBA
was $164.18 (U.S. Department of Labor, Employment & Training Administration, 1996). By 2008 it was $307.52
(U.S. Department of Labor, Employment & Training Administration, 2009b),
nearly double the 1987 AWBA. In order to cover the same amount of UI claims
as in the 1980s, the Department of Employment must have twice the level
of funds.
The third reason was that the proportion of high-wage UI claimants increased
dramatically in 2009Q1. With more claims from high-wage industries such
as mining, more UI claimants were eligible for higher weekly benefits.
Unlike the situation faced in the 1980s, Wyoming’s UI Trust Fund in 2009 is solvent (see Figure 2). By the end of 2009Q1, Wyoming had $257 million in the UI Trust Fund available to pay UI benefits. If current levels are maintained, and based on 2009Q1’s UI cost, Wyoming should have a solvent UI Trust Fund for at least another two years.
Wyoming’s UI Trust Fund condition is much better than that of many other states. As of April 22, 2009, 14 states had run out of money in their trust funds and borrowed millions or billions of dollars from the Federal Unemployment Account to pay their unemployed workers (U.S. Department of Labor, Employment & Training Administration, 2009c). An increasing number of states are likely to face fund shortages as the recession continues. Two of Wyoming’s neighbors, South Dakota and Idaho, have indicated that their state UI trust funds are likely to become insolvent late this year (Bob Mercer, 2009; Spence, 2009). If states that borrowed money from the federal government cannot repay the loans promptly, employers in those states will have to pay higher federal and state UI taxes to restore the funds’ solvency. This could compound problems for businesses that are already experiencing financial trouble as a result of the recession.
Conclusion
Wyoming’s UI claims and benefits payments reached 22-year highs in 2009Q1. All industries experienced substantial increases in the number of new layoffs and UI benefit recipients. Nearly all counties in the state were impacted. The significant increases in UI claimants suggest that fewer re-employment opportunities existed in Wyoming’s labor market in early 2009 than in previous years. Fortunately, Wyoming is not facing insolvency in its UI trust fund in the near future, unlike many other states.
References
Associated Press (2009, April 16). Recession’s grip tight on jobs, housing markets. Retrieved April 16, 2009, from http://www.msnbc.msn.com/id/30244453
Bullard, D. (2009, February 6). Covered employment and wages for second quarter 2008: Slight slowdown in total payroll growth. Retrieved June 10, 2009, from http://doe.state.wy.us/lmi/QCEW/08Q2.htm
Bullard, D. (2009). Wyoming job growth slows in February 2009. Wyoming Labor Force Trends, 46(4). Retrieved June 10, 2009, from http://doe.state.wy.us/lmi/0409/a5.htm
Bullard, D. (2009). Covered employment and wages for third quarter 2008: Mining leads growth in jobs and payroll. Wyoming Labor Force Trends, 46(4). Retrieved May 15, 2009, from http://doe.state.wy.us/lmi/0409/a1.htm
Hagenbaugh, B. (2009, April 7). CEOs expect more job cuts through year’s end. USA Today. Retrieved April 24, 2009, from http://www.usatoday.com/money/economy/2009-04-07-ceo-outlook_N.htm
Mercer, B. (2009, February 18). State unemployment fund likely empty within a year. Black Hills Pioneer.
Spence, W. L. (2009, February 17). State will borrow for unemployment. Lewiston Tribune. Retrieved April 24, 2009, from http://www.lmtribune.com/archived-story/Northwest/382959/
Wen, S. (2008). A study of Wyoming unemployment insurance benefit recipients and exhaustees. Wyoming Labor Force Trends, 45(8). Retrieved May 15, 2009, from http://doe.state.wy.us/LMI/0908/toc.htm
Wen, S. (2004). Wyoming unemployment insurance eligibility, 1993 and 2003: A preliminary report. Wyoming Labor Force Trends, 41(2). Retrieved May 15, 2009, from http://doe.state.wy.us/LMI/0204/a1.htm
U.S. Department of Labor, Bureau of Labor Statistics (2009, April 17). Regional and State Employment and Unemployment Summary. Retrieved April 17, 2009, from http://www.bls.gov/news.release/archives/laus_04172009.htm
U.S. Department of Labor, Employment & Training Administration (2009a). Emergency Unemployment Compensation Extended. Washington, D.C. Retrieved March 2, 2009, from http://www.ows.doleta.gov/unemploy/supp_act.asp#content
U.S. Department of Labor, Employment & Training Administration (1996). Unemployment Insurance Financial Handbook. Washington, D.C.
U.S. Department of Labor, Employment & Training
Administration (2009b). Unemployment Insurance Data Summary. Washington,
D.C. Retrieved April 23, 2009, from http://workforcesecurity.doleta.gov/unemploy/content/data_stats/
datasum08/DataSum_2008_4.pdf
U.S. Department of Labor, Employment & Training Administration (2009c). UI Budget – trust fund loans. Retrieved April 24, 2009, from http://workforcesecurity.doleta.gov/unemploy/budget.asp#tfloans
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by Phil Ellsworth.