Labor Market Information > Wyoming Labor Force Trends > September 2011 > Long-Term Unemployment

Long-Term Unemployment in Wyoming and the U.S.

by: Patrick Manning, Principal Economist

The United States was officially in a recession (see box) from December 2007 to June 2009 (National Bureau of Economic Research, 2010). While the recession technically ended — Gross Domestic Product began to grow again — the unemployment situation has not improved substantially. This situation is sometimes referred to as jobless recovery. The nation has not experienced such a sustained level of unemployment since the Great Depression. This article briefly discusses reasons for and the duration of unemployment in the U.S. and Wyoming from 2006 to 2010.

What is a recession?

The traditional definition of a recession is two consecutive quarters of a shrinking gross domestic product (GDP). In contrast, the National Bureau of Economic Research (NBER) defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Business cycle dates are determined by the NBER. Typically, these dates correspond to peaks and troughs in real GDP, but that is not always the case.

To be considered unemployed, a person must be a member of the labor force, which means he or she must be actively seeking employment. Therefore, if a person voluntarily chooses not to be employed and is not seeking employment, this person is neither counted as a member of the labor force nor of the unemployed. The definitions of the five classes of unemployed individuals can be found below.

Unemployment in the United States

The number of unemployed and the unemployment rate began to increase in the U.S. in 2008, and increased dramatically by 2010 (see Table 1). The number of unemployed and the unemployment rate more than doubled from 2006 to 2009. As unemployment rose, the percentage of individuals who left their jobs voluntarily dropped from 11.8% to 6.0% (see Figure 1) while the percentage of individuals who lost their jobs involuntarily increased from 34.3% to 52.7%. The percentage of re-entrants decreased from 32.0% to 23.4%. This suggests many people were discouraged about the labor market situation and therefore did not have much incentive to reenter the labor force, or that the number of job losers overwhelmed the rest of the other unemployment classes. The percentage of unemployed that were new entrants remained relatively steady.


Job loser:
A person who was gainfully employed, but no longer has employment. This person is still in the labor force, however, as he or she is actively seeking employment.
Completed a temporary job:
Individuals who completed a short term job.
Job leavers:
Individuals who voluntarily leave a job and are seeking other employment.
Individuals who were previously in the work force, dropped out for a period of time, and then began seeking employment again.
New entrants:
Individuals who have never been in the labor force and are now seeking employment.

Source: U.S. Bureau of Labor Statistics. (2011). Geographic Profile of Employment and Unemployment, 2010. Retrieved October 21, 2011, from

As unsettling as the level of unemployment has been, the duration of unemployment also increased over this period. The mean length of time that individuals spent unemployed almost doubled, from 16.8 weeks to 33.0. Until recently, all states provided unemployment benefits for 26 weeks while the majority of states extended benefits using federal funding (National Employment Law Project, 2011). The increase in duration of unemployment led to many individuals exhausting their unemployment benefits without a safety net. Exacerbating the problems of the long-term unemployed is that many employers are reluctant to hire unemployed workers (CNN, 2010).

In Wyoming, the number of unemployed individuals in Wyoming doubled from approximately 10,000 to 20,000 from 2006 to 2010 (see Table 2). While Wyoming's unemployment rate has remained lower than the national average, the state's unemployment rate also more than doubled from 3.2% to 7.0%. Wyoming fared much better than many other states during and following the recession. Several examples of this inequality can be seen in Table 3.

The unemployment rate for Wyoming can be somewhat skewed because the state has considerable in- and out-migration of labor that corresponds with changes in economic conditions relative to other states (see "In- and out-migration and unemployment"). This is due to the fact that the labor force is defined by place of residence. As an example, when mining and other extractive resource activity is high (providing attractive employment opportunities), workers flow into the state but may not establish residence in Wyoming. Conversely, when employment opportunities are limited, these workers leave the state for other opportunities, or simply go home. Therefore, when economic conditions falter, many of these transitional workers leave the state and therefore do not count as unemployed in Wyoming. Those individuals are counted as part of the labor force in the state in which they live (assuming they were actively seeking employment). The result is a lower unemployment rate in Wyoming than if the work force was less willing to relocate (Leonard, 2010).

In- and out-migration and unemployment

An example

An individual working in Wyoming loses his job and decides to move to Texas. If he were eligible and applied for unemployment benefits, that person would be paid through Wyoming's unemployment insurance system. However, since he moved out of state, he is no longer part of Wyoming's labor force and would not count toward Wyoming's unemployment rate.

The reasons for unemployment in Wyoming generally follow the same pattern as that of the nation. The percentage of new entrants to the labor market stayed relatively constant throughout the time period. The percentage of workers who left their jobs voluntarily dropped from 20.0% to 15.0% (see Figure 2), while workers who lost their jobs involuntarily increased from 30.0% to 40.0%. The duration of unemployment was shorter in Wyoming than in U.S. as a whole. This may be due in part to a more favorable economic climate and out-migration of some of the unemployed labor force.

In 2011, the national unemployment rate has dropped slightly to 9.1% for September 2011, while Wyoming has shown more improvement to 5.8%. (BLS, 2011). New jobs are being created, but not at a pace fast enough to lower the national unemployment rate substantially. The labor force is growing at approximately 0.7% a year. The U.S. needs to add an estimated 1.1 million jobs a year in order to keep the unemployment rate constant (CPER, 2010). Will the unemployment rate return to pre-recession rates? If so, when? Any estimate would be based on various assumptions. For example, one estimate is late 2013 (CPER, 2010), while another estimate is 2016 or possibly later (Miller, 2010). Such a rebound would depend on many factors, including changes in monetary and fiscal policy initiatives, regulatory practices, and shifts in aggregate demand.

Principal Economist Patrick Manning can be reached at (307) 473-3837 or


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Isidore, C. (2010, June 16). Looking for work? Unemployed need not apply. Retrieved October 20, 2011, from

Leonard, D. (2010, November). Tracking workers' re-employment after job loss. Wyoming Labor Force Trends 47(11). Retrieved October 21, 2011, from

Miller, D. (2010, November 23). Pre-recession unemployment rates won't be seen until at least 2016. Retrieved October 20, 2011, from

National Bureau of Economic Research. (2010). Retrieved October 19, 2011, from

National Employment Law Project. (2011). Report: States made unprecedented cuts to unemployment insurance in 2011. Retrieved October 21, 2011, from

Scherer, R. (2011, February 7). Nine states don't give maximum unemployment benefits: Does yours? Christian Science Monitor. Retrieved October 20, 2011, from

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