Copyright 2002 by the Wyoming Department of Employment, Research & Planning

 

Thirty Years of Wyoming Employment and Wages

by:  Sherry Wen, Senior Economist

"Approximately 42 percent of Wyoming's employment was in high-paying industries in 1981, but this proportion decreased to one-fifth (20%) in 2000."

Although the past is not necessarily representative of the future of Wyoming's economy, evaluating the State's economic history can serve as an important planning tool for guiding Wyoming's economy into the next 30 years. This article uses 30 years of data to illustrate where we have been and where we are now with jobs and wages in the State. It also shows the impact the major industries had on the State's economy over these three decades. The data used in this study come from the Bureau of Economic Analysis.1 

Historical Trend 

Between 1970 and 2000, Wyoming's employment level went through three significant stages (see Figure 1). From 1970 to 1981, there was rapid employment growth related to the energy boom spurred by the 1973 OPEC oil embargo.2 During this first stage, Wyoming's average annual employment grew steadily from 123,450 jobs in 1970 to 236,186 jobs in 1981. This growth represented a total increase of 91.3 percent or an average annual growth rate of 6.1 percent. 

During the second stage, from 1982 to 1987, Wyoming's employment declined primarily because of the international oil price collapse.3 State employment dropped to 215,393 jobs in 1983, grew slightly in 1984 and 1985, then fell again to 197,978 jobs in 1987. From the peak (1981) to the valley (1987), Wyoming lost a total of 38,208 jobs (-16.2%), roughly the same number of jobs as there were in the Cheyenne metropolitan area in 2000. 

Following the employment slump, Wyoming entered the third stage (1988 to 2000). The number of jobs grew continually to 250,515 in 2000, the most recent year for which data are available. However, the growth was at a slower pace than during the first growth period. It took nearly 11 years to surpass the previous peak of 236,186 in 1981, reaching 239,845 jobs in 1998. The annual average employment growth rate during this stage was 1.8 percent, much smaller than the first stage (6.1%) but more steady and sustainable. 

Changes in Industrial Distribution 

What happened to the industrial distribution of jobs in the State between 1970 and 2000? Which industries dominated Wyoming's economy? Tables 1 and 2 show that in private industries, Services; Retail Trade; Mining; Transportation, Communications, & Public Utilities (TCPU); and Construction provided the most jobs and wages in Wyoming throughout the three decades. However, these five industries developed differently during this time period. 

The Services industry grew continually, even during the period of statewide employment decline. Employment in this industry grew by an average of 3.5 percent each year from 20,498 jobs (16.6% of the State total) in 1970 to 57,976 (23.1% of the State total) in 2000 (see Table 1). Services contributed 9.5 percent of the State total payroll in 1970, but increased to 18.3 percent of the total in 2000 (see Table 2). 

Retail Trade employment stayed relatively flat compared with the other four major industries, with a 2.8 percent average annual growth rate. Jobs increased from 20,829 (16.9% of the State total) in 1970 to 48,199 (19.2% percent of the State total) in 2000 (see Table 1). The contribution to Wyoming's total wages decreased from 11.3 percent in 1970 to 10.6 percent in 2000 (see Table 2).

The Mining industry grew rapidly during the first growth stage. The energy boom enabled this industry to grow by an average of 11.6 percent each year from 11,605 jobs (9.4% of the State total) in 1970 to 38,730 (16.4% of the State total) in 1981 (see Table 1). In the peak year of the boom (1981) Mining's wages exceeded one billion dollars ($1,042,142,000), more than one-quarter (26.0%) of the State's total wages (see Table 2). However, employment in this industry, as well as several others, declined dramatically from 1982 to 1987 because of decreasing oil prices. During these six years, Mining lost more than one-half (20,818 jobs) of its peak total employment and wages declined by $433 million (41.6% of its peak total). By 1987, Mining employment dropped to 17,912 (9.0% of total State employment) and wages fell to $609 million (16.6% of total State wages). Subsequently, Mining employment remained relatively flat until it increased slightly in 2000. The 2000 employment level was 17,216 (6.9% of the State total) with a wage level of $941 million (14.1% of the State total). 

The Construction industry went through an experience similar to Mining. It grew relatively quickly (10.5% on average) during the energy boom, from 7,305 jobs (5.9% of the State total) in 1970 to 21,821 jobs (9.2% of the State total) in 1981 (see Table 1). Total wages grew from $62.8 million in 1970 (8.3% of the State total) to $478.5 million in 1981 or 11.9% of the State total (see Table 2). Construction employment declined during most of the oil bust, losing nearly one-half of its peak total (48.1% or 10,494 jobs). In 1987, the Construction industry accounted for 5.7 percent of total State employment (11,327 jobs) and 6.7 percent of total State wages ($244 million). Despite slight declines in 1988 and 1989, Construction had an average 5.8 percent annual growth rate over the next decade. In 2000, employment in this industry had increased to 7.5 percent of the State total (18,790 jobs) and 8.3 percent of the State total wages ($556.6 million). 

Compared to the Mining and Construction industries, the number of jobs in TCPU remained relatively stable between 1970 and 2000. Employment grew at an annual rate of 5.1 percent, from 10,697 jobs in 1970 to 18,527 jobs in 1981. It fell back to 14,296 jobs in 1987, but remained almost unchanged through 2000 (only 0.06% annual growth rate). TCPU provided 14,403 jobs (5.7% of the State total) in 2000 and $617.5 million in wages (9.2% of the State total). 

During the six-year oil bust, Wyoming lost jobs in Mining (20,818); Construction (10,494); Retail Trade (3,710); Wholesale Trade (4,136); TCPU (4,231); Manufacturing (1,760); and Finance, Insurance, & Real Estate (FIRE, 198). Meanwhile, Wyoming gained jobs in Services (121), Government (6,363), and Agriculture (655). This indicates that the slump in the Mining industry almost certainly had an impact on most of the other industries. For example, the Mining industry's decline might have stopped related construction projects, decreased oil and gas transportation needs, slowed real estate purchases in the State, and led to reduced economic activity in wholesale and retail trade. 

Changes in Average Weekly Wage 

Figure 2 presents the average weekly wage in real dollars4 by industry for 1970 (date of first available data), 1981 (energy boom peak), 1987 (energy boom valley), and 2000 (the most recent available data). Mining, historically the highest paying industry in Wyoming, and FIRE were the only two major industries that kept up with inflation and paid an increasing real weekly wage for most of the years between 1970 and 2000. In contrast, Construction's real average weekly wage decreased significantly over the years. It started as the third highest paying industry with a real weekly wage of $727 in 1970, but dropped to the sixth highest paying industry with only $570 in real weekly wages in 2000. In 2000, most industries paid less than or equal to their 1981 (peak) wages. Retail Trade, Agriculture, and Services were the three lowest paying industries throughout the three decades, continually paying less than the statewide average. 

For purposes of this analysis, we define the industries with an average real weekly wage equal to or greater than the State's average real weekly wage for 1981 ($621) as high-paying industries. In 1981, Mining, Construction, Manufacturing, TCPU, and Wholesale Trade were considered high-paying industries. Total employment for these industries made up approximately 42 percent of total State employment (see Figure 3). By 2000, Construction was no longer considered a high-paying industry as wages fell below the $621 threshold. Additionally, the proportion of employment shared by the remaining high-paying industries dropped to one-fifth (20%) of total employment. 

Summary

Among private industries, Services, Retail Trade, Mining, Construction, and TCPU were the five largest wage contributors in Wyoming between 1970 and 2000. They were also the largest job providers for most of those years. Mining and FIRE were the only major Wyoming industries that kept up with inflation and paid increasing real wages. However, sub-industries and individual firms may have also kept pace. Approximately 42 percent of Wyoming's employment was in high-paying industries in 1981, but this proportion decreased to one-fifth (20%) in 2000. 

1U.S. Department of Commerce, Bureau of Economic Analysis, Regional Accounts Data, Tables SA27 and SA07, April 23, 2002, <http:/www.bea.gov/bea/regional/spi/> (August 16, 2002).

2"Oil Embargo Sparks Energy Boom," Casper Star-Tribune, December 27, 1999, p. A5, cols. 3-6. U.S. Department of Energy, Energy Information Administration, 25th Anniversary of the 1973 Oil Embargo, September 3, 1998, < http://www.eia.doe.gov/emeu/25opec/anniversary.html > (August 14, 2002).

3The increased production from non-OPEC sources and overproduction from OPEC members led to an international oil price collapse. Consequently, U.S. crude oil prices dropped continually from a peak $31.77 per barrel in 1981 to $15.40 per barrel in 1987. For more information, see 
<http://www.eia.doe.gov/emeu/25opec/anniversary.html> and 
<http://www.eia.doe.gov/emeu/aer/txt/tab0516.htm>.

4Because inflation erodes consumers' purchasing power, a given dollar amount of income will not purchase the same amount of goods from one year to the next. Real wages are the actual paid wages (nominal wages) adjusted for inflation. To account for inflation, we use consumer price indexes to adjust the nominal wage to the real wage. The consumer price index used here is "All Urban Consumers - (CPI-U) U.S city average, all items 1982-84 = 100," available online at <ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt>.

Table of Contents | Labor Market Information | Wyoming Job Network | Send Us Mail

These pages designed by Julie Barnish.
Last modified on by Susan Murray.