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Tuesday, May 26, 2020

Shutdown Job Losses: Wyoming and Colorado

We now have the details on how badly Wyoming and Colorado did in the thick of the coronavirus shutdown. It is worth noting that they have both been outperformed by South Dakota.

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I am happy to see several good fiscal conservatives filing to run for the Wyoming legislature. This is encouraging, and it bodes well for the future of our state. Let us hope that in the meantime the current legislature does not do too much harm. The jobs situation in Wyoming is dire, to say the least, especially since our ten-percent loss in private-sector employment comes on top of a long streak of worst-in-the-country jobs growth.

Colorado has had a stronger economy in the past several years, which gave them a bit more cushion for the shutdown. Nevertheless, their 13-percent loss of private-sector jobs is nothing to play around with. 

In fact, Colorado could benefit from adopting its own version of the CARES Act pass-through measure that Representative Chuck Gray developed for the Wyoming special legislative session a week and a half ago. I discuss it in this video, and I wrote a blog article on the same idea a few weeks ago. It would go well with TABOR in Colorado, which by the way is an idea I have helped import and adapt to Wyoming.

Both the Cowboy and the Centennial states are in dire need of a CARES Act pass-through to taxpayers. Here is a rundown of the job losses in both states from March to April:

Total private sector
Wyoming: -21,100 jobs, or -10 percent
Colorado: -309,200 jobs, or -13.4 percent

On the face of it, these numbers suggest that Wyoming has handled the shutdown better, at least as far as April goes. However, we have to look at the context: in March this year, there were 211,300 private-sector employees in Wyoming, less than four percent more than in March 2010. In ten long years, the Wyoming economy had only added four meager percent to its private workforce. You have to go back to 2004 to find a lower jobs number for the month of April.

In one month, Wyoming has lost 15 years of jobs growth.

Colorado, by contrast, saw a 28.5-percent growth in private-sector jobs over the past ten years. Their loss in April is "only" six years' worth of jobs growth. Still bad, of course, and we haven't even seen the May numbers. But this context matters.

Now for the specific industries:

Mining
Wyoming: -1,600 jobs, or -8.1 percent
Colorado: -900 jobs, or -3.3 percent

Wholesale trade
Wyoming: -300 jobs, or -3.7 percent
Colorado: -3,900 jobs, or -3.5 percent

Retail trade
Wyoming: -1,500 jobs, or -5.3 percent
Colorado: -28,800 jobs, or -10.9 percent

Infrastructure (transportation, warehousing, utilities)
Wyoming: -400 jobs, or -2.7 percent
Colorado: -10,000 jobs, or -10.2 percent

Health care and social assistance
Wyoming: -1,400 jobs, or -5.4 percent
Colorado: -38,500 jobs, or -12.6 percent

Hospitals
Wyoming: -100 jobs, or -2.9 percent
Colorado: -1,700 jobs, or -2.8 percent

Nursing homes and residential care
Wyoming: -100 jobs, or -2.3 percent
Colorado: -100 jobs, or -0.2 percent

Social assistance
Wyoming: -500 jobs, or -6.6 percent
Colorado: -8,500 jobs, or -14.5 percent

Private education
Wyoming: -500 jobs, or -15.6 percent
Colorado: -5,400 jobs, or -12 percent

Information
Wyoming: -100 jobs, or -3 percent
Colorado: -300 jobs, or -0.4 percent

Financial services
Wyoming: -300 jobs, or -2.7 percent
Colorado: -5,300 jobs, or -3 percent

Construction
Wyoming: added 600 jobs, an increase by three percent
Colorado: -10,800 jobs, or -6.2 percent

Professional and business services
Wyoming: -200 jobs, or -1.1 percent
Colorado: -23,500 jobs, or -5.3 percent

Manufacturing
Wyoming: -200 jobs, or -2 percent
Colorado: -10,300 jobs, or -6.9 percent

Other Services
Wyoming: -1,600 jobs, or -10 percent
Colorado: -19,700 jobs, or -17.6 percent

And now for the big blow:

Leisure and Hospitality, a.k.a., "Tourism"
Wyoming: -13,600 jobs, or -41.1 percent
Colorado: -151,800 jobs, or -45.5 percent

The tourism industry has virtually been cut in half, and that is just in March. The numbers for May will not be pretty.

Government, by the way, has been virtually unharmed:

Government
Wyoming: zero change in state government, -1,800 jobs or -3.8 percent in local government
Colorado: -300 jobs, or -0.2 percent in state government, -11,000 or -4 percent in local government

In other words, government has gone out of its way to protect its workforce from the shutdown. This is troubling, as it precipitates demands for tax hikes in the future. We can see this clearly in the Government Employment Ratio (GER), which counts the number of state and local government employees per 1,000 private-sector employees. It has increased in both states: 

  • Wyoming maintains the highest ratio in the country, at 317 in April, up from 294 in March; 
  • Colorado remains just a hair over the national average: 202 in April, an increase from 180 in March.

The GER is important, as it gives a rough but policy-wise important indication of the cost that government represents to the private sector. A rise in the GER means that every private worker has to work harder than before to pay for government. 

There is no doubt that both Colorado and Wyoming have a long way to go before they are back to their pre-shutdown strength. Each state has its strengths and weaknesses, with the fight to save TABOR already in full force in Colorado and Wyoming being locked in a battle to lose its advantage of not having an income tax. While those are long-term battles, over the short term both states could act to pass the CARES Act money through to taxpayers. Watch this video for my reasoning behind this idea.  

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