WY Unemployment Insurance Claims and Benefit Payments Reach 10-Year High in FY2003

Wyoming Unemployment Insurance Claims and Benefit Payments Reach 10-Year High in Fiscal Year 2003

by: Sherry Wen, Senior Economist

"These significant changes in unemployment insurance statistics suggest that there were fewer reemployment opportunities in Wyoming's labor market in Fiscal Year 2003 compared to previous years."

The nation’s unemployment rate soared to a nine-year high of 6.4 percent in June…businesses cut 30,000 more positions from their payrolls, marking a fifth straight month without job growth, the Labor Department reported….”¹ As the nation’s economy struggles to recover from the 2001 recession, Wyoming’s Unemployment Insurance (UI) claims and benefit payments² reached a 10-year high in Fiscal Year 2003 (FY2003), which began July 1, 2002 and ended June 30, 2003. A total of 29,203 initial claims³ were filed in FY2003, 26.2 percent higher than the previous year (see Figure 1). The weeks claimed for UI also rose to 226,429, a 30.4 percent annual increase (see Figure 2).

Due in part to the rise in claims, the Wyoming Department of Employment paid over $46 million in unemployment insurance benefits in FY2003. This amount represents a 45.3 percent ($13.5 million) increase in benefits paid compared to FY2002 ($31.8 million).

The major reason for the increase in the amount of UI benefits paid was the increase in UI claimants. The two industries with most of the layoffs were Construction (8,396 initial claims or 28.9%) and Services (5,794 initial claims or 19.8%). Many of the layoffs were due to the seasonal fluctuations the two industries typically experience. All industries experienced increases in UI initial claims in FY2003. The largest over-the-year increase occurred in Construction (50.8%). Manufacturing and Finance, Insurance, & Real Estate (FIRE) increased 41.8 percent and 37.3 percent, respectively.

Wyoming nonresidents filed slightly more than 11 percent of total initial claims in both FY2002 and FY2003 (see Table 1). Services had the highest proportion of out-of-state claims in FY2003 (817 claims or 14.1%).

The number of unique UI benefit recipients (UI recipients) increased from 16,166 individuals in FY2002 to 19,377 in FY2003 (see Table 2). Mining had very little change (1.6%). All other industries had increases in UI recipients ranging from 14.8 percent to 32.7 percent. Among recipients, a total of 4,766 individuals exhausted their regular UI benefits in FY2003, a 68.2 percent increase compared to FY2002. The statewide UI exhaustion rate (the number of exhaustees divided by the number of UI recipients) also increased from 17.5 percent in FY2002 to 24.6 percent in FY2003.

The large increases in UI exhaustees and the higher exhaustion rate indicate that reemployment opportunities in Wyoming’s labor market were fewer in FY2003 compared to the previous year. This change may be a result of the long-term uncertainty of the national economy. For example, more Wyoming employers may not be confident enough to hire additional workers or expand their businesses. Another possibility is that more employees may have come from other states to compete with Wyoming workers for finite job opportunities. Also, unemployed workers in Wyoming may have been less inclined to move and find jobs in other states compared to a few years ago.

A shortage of reemployment opportunities occurred in all industries as shown in Table 2. All industries had a significant increase in the number of UI exhaustees in FY2003 and in their UI exhaustion rates. Again, Construction (1,208) and Services (1,213) were the largest contributors of UI exhaustees. More than half of the unemployed workers who exhausted benefits were in these two industries (25.3% and 25.5%, respectively). Public Administration had the highest exhaustion rate (28.4%) followed by Services (27.7%). Mining had the most significant exhaustion rate increase climbing from 11.8 percent to 20.5 percent, while Construction closely followed, increasing from 14.0 percent to 24.0 percent.

County Level UI Statistics

As shown in Table 3, Natrona County, Laramie County, and Out-of-State represent the highest numbers of UI Initial Claims (each having approximately 12% of the state total). Hot Springs was the only county to have fewer UI claims in FY2003 than in FY2002. Converse and Johnson counties had the highest over-the-year percentage increases in initial claims (75.4% and 70.1%, respectively).

Sweetwater and Hot Springs were the only counties to see fewer UI recipients. Campbell County, on the other hand, had the largest increase in recipients with 400 more unemployed workers collecting UI than the previous year (a 56.0% increase). Four counties (Campbell, Converse, Natrona, and Crook) more than doubled the number of individuals who exhausted their regular UI benefits in FY2003 compared to the previous year. Similarly, Campbell, Converse, and Natrona counties also showed a significant over-the-year increase in the exhaustion rate. Campbell County rose from 8.9 percent to 15.9 percent, Converse County climbed from 14.0 percent to 24.8 percent, and Natrona County jumped from 13.7 percent to 23.6 percent. These increases suggest the three counties experienced the fewest reemployment opportunities in FY2003. Approximately one-third of Big Horn County and Out-of-State claimants exhausted their regular UI benefits, the highest exhaustion rates in FY2003.

Conclusion

Wyoming’s UI claims and benefit payments reached a 10-year high in FY2003. Almost all industries in FY2003 experienced large increases in the number of UI benefit recipients, exhaustees, and exhaustion rates. These significant changes suggest that there were fewer reemployment opportunities in Wyoming’s labor market in FY2003 compared with previous years.

¹“Jobless Rate Hits Nine-Year High,” Casper Star-Tribune, July 4, 2003, p. A1.

²Only Wyoming liable Unemployment Insurance claims and benefits were included. Interstate and Temporary Extended Unemployment Compensation (TEUC) claims were not under consideration.

³Initial claims in this study include new initial claims and additional claims in the year. One person could be laid off more than once in the same year. After the new initial claim was filed, the individual could file an additional claim for each layoff experienced in the same benefit year. Essentially, the number of Unemployment Insurance (UI) initial claims represents the number of layoffs occurring in a specific time period. Even if an individual files an initial claim, the person is not guaranteed to receive UI benefits, since there are several eligibility requirements which must be met. Individuals who are laid off but choose not to file for UI benefits are not counted. Despite this deficiency, UI initial claims are our best way of tracking layoffs.

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