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© Copyright 1998 by the Wyoming Department of Employment, Research & Planning
Since the July 1997 issue of Wyoming Labor Force Trends, Research & Planning has been publishing in-depth studies on Wyoming industries. This month we focus on Retail Trade. Close to one-quarter of the workers posted on Wyomings wage records1 depend on Retail Trade as their primary source of wages. This industry has historically experienced growth and is expected to continue its growth throughout 1998.
This months article will examine three main areas of Wyomings Retail Trade industry. First, a time series reveals the past performance of Retail Trade in Wyoming. Second, we explore projections of the industry into 1998. Third, a characterization of the type of employees that work and stay in the realm of Retail Trade. Figures will illustrate the seasonal nature of employment in this industry and reveal what influence spending patterns and sales tax have on the overall employment of Retail Trade. Tables will show the age, gender and wages for workers in this industry, as well as a 39 percent retention rate of Retail Trade workers in Wyoming from 1993 to 1996.
Retail Trade consists of the selling of merchandise for personal and/or home consumption. Selling merchandise is a highly seasonal industry which is easily influenced by construction projects, weather, tourism and personal spending patterns. The 1987 Standard Industrial Classification Manual 2 divides the Retail Trade industry into seven groups. These Standard Industrial Classification (SIC) groups are:
Figure 1 takes all of the employers, which are called units, under covered employment (see Glossary) and distributes them into the seven industry subgroups mentioned above. Figure 1 also describes the percentage of Retail Trade workers in each industry. The data used to make the chart was derived from the Research & Planning ES-202 publication, Wyoming 1996 Annual Covered Employment and Wages 3.
Wage Records and Retail Trade
In total covered employment, with the exception of Federal Government workers, there were 271,622 workers in 1993. Wage records, in 1993, indicated that the Retail Trade industry employed 72,690 individuals, which totaled 27 percent of Wyomings wage records. (It is important to note that wage records counts each individual that worked at any time during the year, where ES-202 and Current Employment Statistics (CES) data only count positions worked the week of the 12th in a given month. Monthly averages are used to compute annual average employment totals. This is mentioned because when the charts and tables are compared it is important to know why the numbers change4.) According to wage records, 61,040 out of 72,690 Retail Trade workers have Retail Trade as their primary job. A primary job means that the worker depends on this employer for the majority of his/her wages. With close to a quarter of the workers listed on wage records depending on this industry to earn a living, it is very important to understand what influences its employment and its performance.
CES and Retail Trade
Figure 2 is a graph of CES data regarding monthly Retail Trade employment from 1988-96 (see current monthly estimates). The employment levels have a seasonal pattern, which repeats itself in 12-month intervals. The overall upward trend of the graph reveals employment growth in the industry. February is the lowest point in the Retail Trade seasonal employment cycle. In February, there are a variety of factors influencing Retail Trade. First and foremost is the weather. February is one of the coldest times of the year in Wyoming. Thus, there are little to no construction projects planned for this time of the year and therefore there arent purchases being made for construction activities, which fuels the Retail Trade SIC 52 - building materials. Therefore, if construction is down, and purchasing is down, the business for SIC 52 is waning which means the Retail Trade employment subsides during the cold weather until construction picks up again. Also, with cooler weather, tourism is at a low for the year. Tourism fuels many elements within the Retail Trade industry such as gas stations, eating & drinking places, food stores, general merchandise stores, and apparel & accessory stores just to name a few.
Another factor which contributes to the lull in employment is that all of the "seasonal" help hired on a temporary basis for the holidays have been released. March signals steady employment growth which continues for five months peaking in August. The growth is due to better weather, which stimulates construction and tourism, which, as mentioned above, are major influences on Retail Trade industries. As the summer months pass and fall begins, employment declines.
Some factors which could explain the decline are that many of the employees that work in Retail Trade are of high school and college age and fall is when school begins. Thus, many workers that were once available to work are spending their time in school. Another factor that could explain the decline in the fall season is that construction wanes, and the surge of tourism passes as the weather continues to get colder. The decline continues through November. As the holidays begin and Christmas nears, temporary employees are hired and the Retail Trade industry employment sees a brief seasonal surge in December. The increase is attributable to employers seeking additional workers for temporary employment throughout the holiday season. The increase quickly declines through January and bottoms out in February when the seasonal cycle repeats itself.
Even though the employment pattern repeats itself and the employment level overall is increasing over the years, the annual growth varies from year to year as shown in Figure 3. It is interesting that the employment in the Retail Trade industry reached its height of growth in 1994 along with the peaking of Wyomings statewide growth. Both growth rates maintained the same general trend over time.
Revenue generated by retail sales tax is also an indicator of the employment performance in the Retail Trade industry. Figure 4 illustrates the similarity in trends between Retail Trade employment and sales tax. Both reveal gradual growth throughout the years. Also, the retail sales tax shows a big increase in 1994 which coincides with the statewide and Retail Trade growth rates for 1994 mentioned above.
Using the three-month average and a base year of 1996 CES data, with various regression models, Employment Projections were made for the Retail Trade industry in 1998. All of the indicators--employment history, growth rates and sales tax--contribute to the overall behavior of the industry. Figure 5 illustrates Retail Trade's continued growth and seasonal patterns. The growth in 1997 slowed and showed a minimal increase. Figure 5 suggests that 1998 could have a slight increase with a bit more growth than the year before. Overall, the graph illustrates continued growth but at a much slower rate than we had seen in Figure 2.
Workers Who Depend on Retail Trade
Now that the history and probable future growth for Retail Trade has been established, the focus turns to the individuals who depend on the industry as their main source of employment and wages: the workers. According to wage records in 1993, there were 72,690 people in Wyoming employed by the Retail Trade industry. That totaled 27 percent of the jobs in Wyoming. Although 84 percent of the workers in this industry depend on Retail Trade as their primary job, 67 percent of these workers depend exclusively on one Retail Trade employer as their source of income. Only 33 percent of the workers who held Retail Trade as their primary job were working Retail Trade and another job at some point in 1993.
Most of the workers in Retail Trade (57%) are female. Males dominate most industries in Wyoming. The fact that this is not the case in Retail Trade makes the industry unique in Wyoming. The percentage of females to males (43%) is a fairly even gender distribution for Wyoming industry, which would seem to make Retail Trade ideal for gender comparisons of wages and retention of workers within the industry. However, this study of employment in the Retail Trade industry is just that, a study of employment not of occupation or of tenure. Therefore, when looking at wages and gender one must be careful not to draw direct comparisons.
Table 1 shows those individuals who had Retail Trade as their primary job in 1993. The table was made by taking wage records for all four quarters in 1993 and matching social security numbers with the current Wyoming Drivers License file. This allows information such as gender and age to be determined. The missing files are those wage record files that could not be matched by Social Security Numbers for various reasons. The table breaks out wages earned over the year, by gender and age. The largest number of males (4,557 workers) are 25-34 years old. Males have the largest wage concentration in the highest wage section ($12,452.50+ per year). Females also have the most workers on the 25-34 year old category. The largest wage concentration for females falls in the $6,350.89-$12,452.49 per year wage section.
The age group of 25-34 year olds make up the largest section of workers in Retail Trade (17.2%). One reason for this could be that these people are within the ages of non-traditional college students and could be trying to attain some sort of advanced education and the seasonal schedule and flexible hours of Retail Trade make it manageable for them to work and go to school. This industry may attract people with children because of the flexible schedule and hours of the industry. Therefore, they could work while their kids attend school. Another type of worker that would fall in this age group are those who are trying to get experience for their resumes. This industry could be a first job for many individuals, and since many Retail Trade jobs dont require work experience it is a relatively easy industry to get into. Other workers in this age group may be married and could be working in Retail Trade to supplement a spouses income or just for something to do during the day.
Teenagers make up 16.2 percent of the primary jobs in Retail Trade. These workers are of high school age and could be going to school and working part time. They are not usually trying to earn an income to support themselves or an entire family. Retail Trade jobs are, for the most part, "low paying" jobs that dont require previous experience or special skills. Naturally, a teenager with no prior work experience and who only wishes to work for a little extra spending money is an ideal employee for the Retail Trade industry. For a more in-depth analysis of teenagers in the work force please read the article "Work Experiences of Wyomings Youth" in the July 1997 issue of Trends5.
A Comparison of 1993 to 1996
The year 1996 didnt bring a lot of change regarding the characteristics of workers in Retail Trade. Table 2 reveals the same layout as Table 1 only for 1996. Table 2 was made the same way as Table 1 by matching wage records with the Wyoming Drivers License database. The results revealed that there were 77,110 workers who worked in Retail Trade in 1996 and 83 percent (64,355) of them had it as their primary job. The gender distribution for 1996 is 42 percent male and 58 percent female for all Retail Trade jobs, which is a one percent change from 1993. The largest number of males (4,497 workers) are still 25-34 years old. The biggest concentration of wages for males remains in the highest wage section ($13,519.60+ per year). Females have the most workers (5,442) in the 24-35 year old age category as well. The largest concentration of wages for females remains in the second highest wage category ($6,817.05-$13,519.59).
Due to the fact that teenagers make up a significant part of the Retail Trade employment, it might be expected that the industry would have a higher turnover rate as those teenagers age. Spending their teenage years in Retail Trade may have given them the work experience needed to advance in a new career which pays more as their need for more income increases. Also, employing teenagers can be a seasonal challenge as many teenagers are of high school and college age, which means they must attend classes. Some may be able to juggle both classes and a job in Retail Trade while others may work on the holidays and summer breaks from school but prefer to attend classes full time during the traditional school year.
A database was created to see what the actual turnover was in the industry. Wage records from 1993 were matched with wage records from 1996. This supplied all workers in 1993 who remained working in Wyoming in 1996. To get only those workers who stayed in Retail Trade a match was done on social security numbers and SIC codes 52-59 (the seven groups of the Retail Trade industry mentioned at the beginning of this article). The results showed that 23,611 workers out of the original 61,040 stayed with Retail Trade as their primary job. Over half (61%) of all employees in Retail Trade either leave the labor force or find another job in a different industry. That means the industry had a 39 percent retention rate of its employees from 1993-1996. Table 3 shows the age breakouts and gender of the workers who remained in the industry. Ages are separated by how old the workers were in 1993.
The retention rate of 39 percent could be due to a variety of elements. A few factors could be the low wages and the inconsistent hours. These factors discourage many workers from making a career out of Retail Trade. So, as this study shows, the majority of workers look to Retail Trade as a temporary job that gives them some work experience and a little pocket money and once they see an opportunity to move on, the majority of workers do.
This article has taken a brief yet in-depth look at the past performance, future outlook, and other factors which influence the Retail Trade industry. The seasonal nature of Retail Trade employment was explored, and found that construction projects, tourism, and the weather greatly influence the employment pattern of the time series. CES data combined with various regression models optimistically forecast future growth for Retail Trade. Workers in this industry total nearly 25 percent of the total Wyoming workers on wage records. The distribution between genders remained fairly even from 1993 to 1996 with only a one percent change. Teenagers and individuals between 25 and 34 years old make up the highest concentration of workers in the industry. Lack of work experience and flexible hours are possible explanations for this. When comparing how many workers stayed in Retail Trade from 1993 until 1996, over half of the workers (61%) left the Wyoming labor force or found another job in a different industry. Low wages and the lack of benefits are possible explanations for the 39 percent retention of workers. Overall, the Retail Trade industry is growing and is anticipated to continue its growth throughout 1998. Employee retention numbers do not seem to influence the seasonal pattern or hurt the yearly growth.
1 Wage records - All employees and earnings of those individuals whose employer is subject to Wyomings Unemployment Insurance laws. This excludes federal and self-employed individuals.
2 Executive Office of the President: Office of Management and Budget, Standard Industrial Classification Manual, 1987, pp. 313-334.
3 Wyoming Department of Employment, Research & Planning, Wyoming 1996 Annual Covered Employment & Wages, 1996, pp. 43-44.
4 Mike Evans, "Understanding the Different Employment Measures," Trends, April 1998, pp. 1-4.
5 Carol Toups, "Work Experiences of Wyomings Youth," Trends, July 1997, pp. 1-6.
Kimber Wichmann is a Senior Statistician with
Research & Planning, specializing in Current Employment Statistics (CES).
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