Key Labor Market Indicators Show Improvement for 2000
by: Tom Gallagher, Manager data provided by: David Bullard, Mike Evans, and Rich Peters tables and figures by: Susan Murray and Krista R. Shinkle
Based on current projections, employment growth in Wyoming during 2000 stands at 2.3 percent. This level exceeds the growth for any year since the 1995-96 slowdown. On an annual average basis, employment in nonagricultural establishments will have grown by a projected 5,400 jobs during the year. The number of unemployed also fell in 2000. The number of unemployed is projected to decline from 12,700 persons in 1999 to 11,245 in 2000. The number of jobs increasing by a factor of +3.7 relative to the decrease in the number of unemployed indicates that employment growth was fueled not simply by a reduction in the number of unemployed but by an increase in the number of persons recently entering the labor market and successfully finding work.
The available statistical data support anecdotal information suggesting that labor is increasingly difficult for employers to find in Wyoming. This tightening of the labor market places greater emphasis on understanding how the available human resources can best be utilized. The year 2000, for Wyoming, is characterized by positive change in key labor market indicators.
As is shown in Figure 1 and Table 1, the growth rate in the civilian noninstitutional population ages 16 and over has been a flat 0.5 percent for the year 2000 and during the previous two years. Over the same period, the share of Wyoming’s civilian noninstitutional population actively participating in the labor market has shown growth greater than population growth. For example, the labor force grew by 1.6 percent in 2000 while the civilian population grew by only 0.5 percent. The labor force grew 3.2 times faster than population. While the labor force also grew faster than population in 1998 and 1999, the significant difference in 2000 is that a greater proportion of those entering the labor market found a job.
Not only did more people find jobs in 2000 than in 1999 but the industrial distribution in the pattern of job growth also changed. In 1999, most job growth was found in Services (3,200 jobs) and Construction (1,200 jobs), while employment in Mining decreased by 1,100 jobs. Job growth was more generalized throughout all industries in 2000. Even though the largest single growth sector was Services (1,900 jobs), and Construction continued to grow (800 jobs), employment in Mining grew by 600 jobs and Trade (wholesale and retail combined) grew by 1,000 jobs. In 2000, projected employment in Mining will approach the level it reached in 1998.
Labor Supply
In 2000, the supply of labor began pushing its upper bounds. As more people found work in 2000, the employment to population ratio (Figure 2) rose to a five year high of 69.0 while the unemployment rate fell to 4.2 percent, its lowest level in nearly two decades.
After rising slightly in 1999 to 12,700, the number of persons unemployed declined to an estimated 11,245 (-1,455) in 2000. Over the same period, the number of persons receiving Unemployment Insurance benefits (see Figure 3) at any time during the year declined by a comparable 1,462 persons.
While there is still room for expansion in the labor force from the existing population supply, it is not clear whether new entrants to the labor market reside within commuting distance of growing demand. In October 2000, Wyoming’s seasonally adjusted unemployment rate was estimated at 3.8 percent (see Seasonally Adjusted State Unemployment Rates), compared to unemployment rates of surrounding states (with the exception of Montana) falling in the range of 3.1 to 2.4 percent. Based on these comparisons, it appears that additional labor in Wyoming could also be drawn from the current ranks of the unemployed. However, even if current demand were to remain constant, simply finding labor to replace those who retire may become increasingly difficult for employers.
Affect on Wages
The amount of available labor in Wyoming can also be increased through the more extensive use of currently employed workers. And that is precisely what employers did in the first and second quarters of 2000. Compared to 1999, total payroll in first quarter 2000 rose by 11.0 percent and in the second quarter by 7.4 percent (preliminary). The average wage grew by 7.6 percent in the first quarter and 4.6 percent in the second quarter. With employment growth lagging behind payroll growth, it is apparent that in addition to adding workers, employers also gave current workers additional hours and weeks of work.1
Payroll grew by $143 million in the first quarter of 2000 compared to a growth of $51 million in the first quarter of 1999. Recently released data (see Table 2) indicates that in 1999, following a 3.7 percent growth, the average wage in Wyoming ranked 45th in the nation. This ranking was unchanged from 1998.2 Total payroll information for 2000 will not be available until June 2001. Even so, the strong payroll growth in the first half of the year suggests that the average wage is growing materially faster in 2000 than the 3.7 percent rate of growth experienced in 1999. Wyoming may be able to achieve a greater level of wage parity with some states in the region (e.g., Nebraska, South Dakota), but it still leaves us a long way behind other states (e.g., Colorado, Texas, California) with which we traditionally compete for human resources.
Note: Benchmark revisions to the labor force and establishment employment series will be published in the April issue of Trends as they were last year.
1For more information on employment, visit the Covered Employment section of our website at http://lmi.state.wy.us/.
2Carol Kjar, "Competitive Wage Ranking: Retaining Wyoming's Workforce," Wyoming Labor Force Trends, March 2000, pp. 16-17.
For more information on this article, Tom Gallagher can be reached at tgalla@state.wy.us or (307) 473-3801.
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