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Thursday, March 19, 2020

State Employment in January: Neighboring States

We already know that thanks to the talk about a corporate income tax, Wyoming is doing poorly in terms of private-sector jobs. But what about our neighbors?


On Monday I explained that the January numbers from the Bureau of Labor Statistics showed Wyoming losing both jobs, wages and hours worked in the private sector. Today we are taking a look at our surroundings: Idaho, Colorado, Montana, Nebraska, South Dakota and Utah. We also throw in North Dakota, since they are also a rural and relatively oil-dependent state. It has been said, namely, that Wyoming needs a big government because we are a rural state.

Let us start with the last point. Based on the January BLS numbers, here is the Government Employment Ratio, or the number of state and local government employees per 1,000 private employees:

Table 1

Government Employment Ratio
North Dakota213
South Dakota194

In other words, we have by far the largest government workforce in the region (and in the country, by the way).  

As I noted in my Monday article, we lost private-sector jobs over January 2019. The same cannot be said for the other states in the group. Utah, a perennial job machine, added 38,300 jobs, for a total of 1.3 million. In fairness, the Beehive State also expanded government: a total of 5,000 more state and local government jobs. Their GER fell marginally from 168 in January 2019 to 167 in January 2020. 

In Idaho, private-sector employers added 15,300 people to their payrolls. At the same time, government employment grew by 4,200, with both the state and local governments growing employment more than the private sector. Consequently, their GER went up from 181 to 183.

A similar trend is visible in Colorado, where Governor Jared Polis and his Democrat-run legislature put another 5,700 people on state payrolls. Together with another 4,900 employees in local governments, this made for a slight GER increase from 170 to 171.

Montana has been struggling with Medicaid Expansion, which reversed a trend of shrinking health-care dependency on government and growing private coverage. As a result, the state government has had a fiscal boondoggle on its hands. Narrowly avoiding crippling tax hikes, the state has allowed its private sector to great new jobs at a faster pace than government. In fact, as displayed in Figure 1, Montana has seen a consistent drop in its GER for the past ten years:

Figure 1
Source of raw data: Bureau of Labor Statistics

Colorado also saw a GER decline - until they decided they could afford an all-out leftist government. 

The Dakota states have seen only marginal increases in employment, but they have also been prudent enough to reduce their state workforces:

Table 2
PrivateState govLocal gov
South Dakota0.63%-1.10%1.21%
North Dakota0.32%-2.63%1.76%

North Dakota, it turns out, is doing only marginally better than Wyoming. In terms of weekly pay, their most recent numbers actually place them slightly below the Cowboy State: 

Table 3
Weekly hrsHrly wagesWeekly pay
South Dakota-0.30%4.71%4.40%
North Dakota-2.59%1.03%-1.58%

These are, of course, the changes in individual average weekly payroll. Looking at the entire private-sector workforce, the weekly payrolls in North Dakota declined by almost $4.2 million, or 1.3 percent. Percentage-wise, this is bigger than the 0.9-percent drop in Wyoming. All the other states saw a rise in total weekly payrolls, with an astounding 9.4-percent rise in Utah; imagine what the injection of that much more money into their economy will do for growth and household finances.

Nebraska employers paid out 5.56 percent more money per week in January 2020 than in January 2019. In Idaho the growth was 5.2 percent, in Colorado 5.1 percent and in South Dakota 5.05 percent. Montana lagged behind these big-growth states at 2.9 percent, which of course is still a substantial increase over Wyoming and North Dakota. 

All in all, the states in our region are doing reasonably well. The problems in North Dakota are ostensibly related to the volatility of their minerals industry (oil, basically), a character trait they share with Wyoming. However, even as they have benefited from the oil bonanza and now seem to have a hangover from it, overall they have been doing better than Wyoming.  

The real question, of course, is what the Rocky Mountain states can learn from Utah, the perennial growth champion.

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