© Copyright 2004 by the Wyoming Department of Employment, Research & Planning

WYOMING LABOR FORCE TRENDS

Vol. 41 No. 12    

 

 

Wyoming’s Areas of Substantial Unemployment

by: Brad Payne, Senior Economist

While Wyoming still has two areas identified as potential Areas of Substantial Unemployment in Program Year 2005, the affected population is significantly smaller than in Program Year 2004.

As part of Wyoming’s Labor Market Information (LMI) Cooperative Agreement with the Federal Government, potential Areas of Substantial Unemployment (ASU) are identified annually for the purpose of allocating federal funds under the Workforce Investment Act (WIA). The ASU accounts for one-third of the formula used to allocate funding for WIA Youth and Adult Activities Programs (U.S. Department of Labor, n.d.). Developing ASUs help us to identify areas of the state facing economic difficulty. Fewer ASUs may indicate a robust economy. On the other hand, a community’s capacity to demonstrate a high unemployment rate could indicate the availability of labor to businesses that might be considering relocation to the area.

This article provides an overview of the designation process and illustrates Wyoming’s Program Year 2004 (PY2004) and PY2005 areas with substantially high unemployment.

In order to qualify as an ASU, the Employment and Training Administration stipulates three requirements regarding geography, population, and unemployment rate. First, the area must be composed of geographically contiguous cities, counties, census tracts, or other Bureau of Labor Statistics (BLS) areas within the state. Second, the area’s population must be at least 10,000 persons. Third, the area’s 12-month average unemployment rate for the July-to-June reference period must be at least 6.5 percent. The challenge is to build as large an area as possible that meets the three requirements.

If the statewide unemployment rate is 6.5 percent or higher, the state qualifies as an ASU in its entirety. If the statewide unemployment rate is less than 6.5 percent, BLS has established three methods for building a qualifying ASU. First, Local Area Unemployment Statistics (LAUS) areas (e.g., counties) can be added together to form an ASU. Second, LAUS areas can be subtracted from a larger geographic area to form the ASU. For example, a complete county can be added to three census tracts (in neighboring counties) to create an ASU, or an ASU could be created by subtracting two counties from the state. The third method used to build an ASU is known as census-sharing of areas. This method allows partial LAUS areas (e.g., census tracts) to stand alone as an ASU, to be added to other partial areas, or to be subtracted from other partial areas in order to build a whole ASU. In PY2004 and PY2005, Wyoming’s ASUs were constructed using the census-sharing method.

Map 1 illustrates the PY2004 ASUs. Two qualifying ASUs were identified within Wyoming: the Central/Southwest ASU and the Cheyenne ASU. Based on the 1990 census, the two areas had a combined population of 98,387 - accounting for 21.7 percent of Wyoming’s total population. 

The PY2004 Central/Southwest area included contiguous census tracts in nine counties. 

The only census tract in Fremont County not included in the ASU was tract 9835 (part of Riverton) while the only census tract in Lincoln County not included was tract 9784 (Kemmerer). The combined 1990 population for the contiguous census tracts was 16.6 percent (75,589) of the total statewide population, and the ASU unemployment rate was 6.5 percent.

The PY2004 Cheyenne ASU illustrated in Map 2 consists of six contiguous census tracts located south and west of the city of Cheyenne (in Laramie County). The combined population for the Cheyenne ASU was 22,798. This total represents 31.2 percent of Laramie County’s population and 5.0 percent of the statewide population. The 12-month average unemployment rate (beginning July 2002) for the six census tracts was 6.6 percent.

Map 3, the PY2005 designated ASUs, shows a marked difference from the PY2004 ASU determination. While Wyoming still has two areas identified as potential ASUs, the coverage area and the affected population is significantly smaller than in PY2004. The two qualifying areas are the Central ASU and the Cheyenne ASU. Again based on the 1990 census, the two areas combined for a total population of 75,780, or 16.7 percent of the statewide total population.

The PY2005 Central ASU includes census tracts in only two counties: Fremont and Natrona. The Central ASU population is 49,938 (11.0% of the statewide population) and the unemployment rate is 6.5 percent. The 33.9 percent decrease in the ASU population from PY2004 to PY2005 is the result of significant decreases in most county unemployment rates for the corresponding reference periods. For example, Lincoln County’s average unemployment rate decreased by 1.3 percentage points from PY2004 to PY2005 while Sweetwater and Uinta counties’ unemployment rates fell by 0.8 and 0.9 percentage points, respectively.

While the statewide ASU totals decreased between PY2004 and PY2005, the Cheyenne ASU experienced an increase over PY2004. As shown in Map 4, the current designation adds census tract 0007 to the six previously designated tracts. The area’s combined population is 25,842, representing 35.3 percent of Laramie County’s 1990 population. The Cheyenne ASU accounts for 5.7 percent of the statewide population. The July 2003 to June 2004 average unemployment rate for the Cheyenne ASU is 6.6 percent. The 13.4 percent increase in the Cheyenne ASU population from PY2004 to PY2005 is due to an increase in Laramie County’s unemployment rate between the corresponding reference periods. The 12-month average unemployment rate increased from 3.7 to 4.1 percent.

A reduction in the size of the Central ASU from PY2004 to PY2005 indicates an improvement in Wyoming’s economic situation. However, while conditions may be good for workers and jobseekers, low unemployment rates may suggest labor supply problems for economic developers and growing businesses.

References

U.S. Department of Labor, Employment and Training Administration. (n.d.) Retrieved December 20, 2004 from http://www.doleta.gov/budget/WIAFormDesc.pdf 

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