Friday, May 26, 2017

Wyoming Employment by County, Part 2

Here is the second part of our review of county-level employment; apologies for the somewhat telegraphic nature of this short article. 

This part reviews earnings in the form of total wages earned in the private sector as a whole, in minerals and in non-minerals. As in the first part, the numbers here are for the third quarter of 2016, unless otherwise specified. That is the latest time period for which we have this kind of county-level data.*

Figure 1 reports changes in total private-sector wages earned, by county, in Q3 2016. It also shows changes in private-sector employment that same quarter:

Figure 1

Wages tend to change somewhat more dramatically than employment. There are two possible explanations for this: the loss of higher-paying minerals jobs, and a decline in earnings among workers who still have their jobs. While the first explanation is fairly obvious, we will control for the second part a bit later by looking at average wages for the non-minerals part of the private sector. 

Private-sector wages play a huge role in the local economy. Without good, private-sector wages, a community cannot thrive, and beyond a certain point it enters a phase of long-term decline. Even if Figure 1 (and the first part of this two-part series) only display annual changes in one quarter, regular readers of this blog know that this negative picture of employment and earnings is not an anomaly. Quite the contrary.

Figure 2 displays the same data as Figure 1, but specifically for the minerals industry:

Figure 2: Carbon county is excluded due to data inconsistency

 Here, we do not have quite the same consistency in wages fluctuating more than employment. It is likely that counties where total minerals wages drop more than employment are counties with a high dependency on minerals jobs to begin with. This would suggest a general decline in earnings on those minerals jobs that remain, ostensibly as a method for minerals companies to maintain whatever operations they want to continue to invest in.

Last but not least, let us compare the decline in total wages in the minerals industry compared to private non-minerals industries:

Figure 3

This is an interesting chart, because it confirms that there are two depressing forces at work in our state's economy. There is no doubt that the minerals industry is under pressure, as the grey bars show. But at the same time, the green bars reveal that non-minerals industries are cutting payrolls - I have repeatedly pointed out that over the past year less than half of our lost private-sector jobs are in minerals - and, which is the key point here, those cuts are generally geographically independent of where minerals jobs are being cut. In fact, in counties with small declines in minerals earnings, non-minerals appear to take a larger hit. 

It would be easy to explain the results in Figure 3 with the simple fact that some counties are dominated by minerals jobs, while others are not. That is indeed true, but all that we derive from that point is that the depression in our state's economy hits whatever industries dominate each individual county.

All these numbers are important, but let us also remember that they are six months old. Since then, as I have explained, we have seen emerging signs of an economic stabilization. Those signs are not yet indisputable, but they are visible enough to suggest that by the second half of this year, our economy will, in general, no longer be losing jobs. What these county-level numbers tell us, though, is that once we get to that point, our entire state - not just its minerals regions - will need a series of reforms to strengthen the private sector and structurally reduce government.
*) Once again, raw data is from the Bureau of Labor Statistics.

No comments:

Post a Comment