myth: montana ranked last among states in per capita...

Economic Update

How Does Montana’s Economy Stack Up?

Barbara Wagner, Chief Economist,

MT Dept. of Labor and Industry

Presentation to Montana SHRM State Conference

May 4, 2017

Montana & U.S. Personal Income Growth

Source: Bureau of Economic Analysis (BEA)

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

2011 2012 2013 2014 2015 2016

U.S.Montana

Industry Employment Change over the Year ending 2016Q3

Source: Quarterly Census of Employment and Wages, BLS and MT DLI

5-Year Growth

1-Year Growth

-15.0% -13.0% -11.0% -9.0% -7.0% -5.0% -3.0% -1.0% 1.0% 3.0% 5.0%

Mining, Oil and Gas

Admin & Waste Services

Information

Federal Government

Management

State and Local Gov

Financial Activities

Transportation & Utilities

Trade

Other Services (except Public Administration)

Leisure Activities

Health Care and Education

Construction

Professional Services

Manufacturing

Ag & Forestry

Unemployment since 1980

Source: CPS, BLS, and LAUS, BLS and MT DLI

0

1

0

2

4

6

8

10

12

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

U.S.MontanaRecession

Normal Unemployment Range

Tighter Labor Markets MeansHigher Wage Growth

0

2

4

6

8

10

12

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

U.S

. Un

em

plo

yme

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Rat

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Gai

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Ho

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ver

Pri

or

Year

U.S. Unemployment RateTotal Compensation Per HourWages and Salaries

Source: All U.S. data. Employer Costs for Employee Compensation, BLS

6th Fastest Wage Growth 2010-2015


Montana Average Annual Wage

$40,057

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Fastest Real Wage Growth Ever Recorded

Source: Quarterly Census of Employment and Wages, BLS and MT DLI, adjusted using the CPI-U

Montana Average Annual Wage


$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Projected$41,000

?

Real Wage Growth Among Regions(2015 End Year)


Take Away Points

• U.S. and Montana economies doing well.

• Montanans experiencing real wage growth.

• Weakness in oil and gas drag on overall gains.

Industry Employment Change over the Year ending 2016Q3


5-Year Growth

1-Year Growth

-15.0% -13.0% -11.0% -9.0% -7.0% -5.0% -3.0% -1.0% 1.0% 3.0% 5.0%

Mining, Oil and Gas

Admin & Waste Services

Information

Federal Government

Management

State and Local Gov

Financial Activities

Transportation & Utilities

Trade

Other Services (except Public Administration)

Leisure Activities


Construction


Manufacturing

Ag & Forestry

Average Annual Wage by Industry 2015

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000

Leisure Services

Other Services

Admin and Waste Services

Real Estate

Trade

Ag and Forestry

State and Local Gov


Manufacturing

Construction

Information

Transportation and Utilities


Finance and Insurance

Fed Gov

Management

Mining, Oil, and Gas

Source: 2015 Quarterly Census of Employment and Wages, BLS and MT DLI

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mill

ion

s $

MININGConstruction

Other Leisure ActivitiesTransportation

Financial ActivitiesAgriculture

Business Services

Government

Total Wages Paid by Industry

ManufacturingTrade

Source: Quarterly Census of Employment and Wages

Montana Industry Composition

Source: 2015 Quarterly Census of Employment and Wages, BLS and MT DLI

Montana Over-the-Year Employment and Wage Growth by Quarter


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2011 2012 2013 2014 2015 2016

EmploymentWages

Over-the-Year Employment and Wage Growth by Quarter – Eastern Region

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

2011 2012 2013 2014 2015 2016


Regional Growth Chart

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2011 2012 2013 2014 2015 2016

Source: LAUS, BLS and MT DLI

Northwest Southwest North Central South Central East

Take Away Points

• Montana’s economy is performing well.

• Very strong performance in Western Montana.

• Decline in oil and gas activity has impacted the state’s economy and budget.

• Eastern region in a recovering bust.

Signs of The Future

• Colstrip

• Worker shortage

• Recruitment and retention

• Preview of College Worker Supply and Demand Report

Concerns about Colstrip

• Low natural gas prices have reduced global demand for coal.– Coal-mine layoffs in Montana less than national impact

(about 158 jobs lost in 2016).

• Legal settlement requires partial closure by 2022.– Jobs impact depends on who you ask.

Montana’s Population by Age and Gender, 2014

Under 5

5 to 9

10 to 14

15 to 19

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 to 84

85 and over

(42,000) (32,000) (22,000) (12,000) (2,000) 8,000 18,000 28,000 38,000

MALE FEMALEOver 65 = Retired

Under 15 Children

Montana’s Population by Age and Sex, 2014Male and Female U.S. Census Bureau


Under 5

5 to 9

10 to 14

15 to 19

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 to 84

85 and over

(42,000) (32,000) (22,000) (12,000) (2,000) 8,000 18,000 28,000 38,000

Source: 2014 Population Estimates by Age and Gender, U.S. Census Bureau

MALE FEMALE

Over 65 = Retired

Under 15 Children

Forecasted Labor Market Tightness

Source: MT DLI Labor Force and Employment Forecasts



Assumes Increased Labor Force

Participation among 25-70 Year Olds

Out of the Labor Force Chart

Labor Force Status of Montanans 16 & Older

May 2012-Sept 2015

• Not many out of the labor force.

• But we need them all…

Forecasted Jobs



Labor Force: +4,500Jobs: +5,500

Net Unemployment: -1,000

Solutions to a Worker Shortage

1. Recruit more people into Montana.

– Other states also have aging populations.

– Wages are higher in other states.

2. Recruit more workers into the labor force.

0%10%20%30%40%50%60%70%

Total Women American Indian Veteran (18 andOver)

Disabled Less than HighSchool

Labor Force Participation Rates by Select Demographics

Source: Current Population Survey and 2011-2013 American Community Survey

~4,000Net People Each Year

Montana Labor Force Participation Rate by Education Level

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Less than High School High School Graduate Some College orAssociate's

Bachelor's or Higher


54.8%

40.3%

13.40%

9.50%

5.80%

12.80%

9.60%

14.00%

16.40%

23.40%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Men

Women

Montana Employment Status by Gender


3. More full-time employment.

– 7th highest percent of part time work in the nation.

– Shortest work week in the nation.


Full-Time, Year-Round

Did Not Work

Part-YearPart-Time

Full-Time, Part-Year

Part-Time, Full-Year


4. Reduce time out of labor force for retraining.

– More on-the-job training like internships and apprenticeships.

– More business-paid training for specific skills.

– More harmony between college major & jobs in demand.

5. Improve labor productivity to produce more with fewer workers.

– Technology improvements.

– Better job matching.

– More training for professionals.

Take Away Points

• Montana’s workforce is aging.

• Workplaces may need to adapt to recruit new workers.

• Greater focus than ever before on recruitment and retention.

How can DLI help?

Additional Effects

• Most openings and wage growth among low wage jobs

• More benefits and more diverse benefits offered

• More wage transparency in hiring, but not promotions.

Suggestions to a Worker Shortage for Businesses

• Paid leave for family care

• Promote from within with worker development

• Realistic expectations of job duration and turnover

– Hire people who are “over-qualified”

• Reduce “credential creep”

• Expect more on-the-job training– Basics for people new to

workforce

– Apprenticeship

• Pay process transparency and set wage increases

Labor Market Information andFinding workers

www.lmi.mt.gov

Wages by Occupation by Region

http://www.lmi.mt.gov/

Cost of Living Increases

www.bls.gov/bls/escalation.htm

http://www.bls.gov/bls/escalation.htm

What Jobs are In Demand

Top Occupations

Occupation

Annual Openings 2015 MT

Average

Annual

WageOpenings Due

to New Jobs

Openings Due

to Workers

Leaving

Total

Annual

Openings

1 Cashiers 121 651 771 $21,270

2 Retail Salespersons 203 546 750 $27,130

3Combined Food Preparation & Serving

Workers, Including Fast Food165 347 511 $19,860

4 Waiters and Waitresses 66 427 493 $20,970

5 Registered Nurses 209 236 445 $62,650

6 Office Clerks, General 97 236 333 $29,400

7 Bartenders 66 208 273 $20,010

8 Maids and Housekeeping Cleaners 103 169 272 $21,760

Local Area Profiles

www.lmi.mt.gov

Click button at top.


Preview of the College Report

• Available June 2017

• Collaboration between OCHE, DLI, DOR, Carroll College, & Rocky Mountain College.

Percent of Graduates from Montana Colleges that

work for a Montana employer in the five years

after graduation.

Graduates Earn Above Median Wages within Three Years of Graduation

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

1 2 3 4 5

Rea

l Wag

es (

20

15

do

llars

)

Years after Graduation

Median Wage

All GraduatesEmployed Year-Round

Entry-Level Wage

Source: MT DLI, OCHE MUS, RMC, and CC graduate data wage match. Real wages

reported in 2015 dollars using the CPI-U.

$35,200

$46,720

$38,620

$23,970

Workforce Outcomes by Degree

Source: DOR, OCHE MUS, RMC, and CC income data match summarized by MT DLI. Income is defined as lines 7, 12, 17, and 18 on the MT income tax return.

Certificate of Technical Studies

(<1 year)

Certificate of Applied Scenice

(>1 year)

Associate Degree

Bachelor Degree

First Professional Degree

Masters Degree

Doctoral Degree

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

40% 50% 60% 70% 80% 90% 100%

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Percent Filing One-Year After (Resident and Non-Resident)

Wage Premium for Bachelor’s DegreeVaries by Program

Source: MT DLI, OCHE MUS, RMC, and CC graduate data wage match. Allied health excludes

surgical technology and respiratory care. *= Certificate of Applied Science graduates.

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$10,000

$20,000

$30,000

$40,000

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Smallest PremiumsLargest Premiums

$36,370

$1,460

Workforce Outcomes by Program

Liberal Arts

Business

Health Professions

EducationSocial Science

Engineering

Physical Science

Agriculture, Natural Resource and Conservation

Construction, Mechanic and Transportation

Culinary Arts and Recreation

CommunicationComputer and Info

Science

Human Services

Architecture

Legal Professions

0

10,000

20,000

30,000

40,000

50,000

50% 60% 70% 80% 90%

Med

ian

Ear

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Inco

me

On

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ar A

fter

Gra

d

Percent Filing One-Year After Grad (Resident and Non-Resident)

Source: DOR, OCHE MUS, RMC, and CC income data match summarized by MT DLI. Earned income is defined as lines 7, 12, 17, and 18 on the Montana income tax return, not including farm income.

Migration Helps Fill Worker Gaps

Graduates migrate from the West into the Central and Eastern regions.

Colleges develop specializations.

Most employers hire graduates from the same region.

Source: MT DLI, OCHE MUS, RMC, and CC graduate data wage match.

MORE INFORMATION AVAILABLE:WWW.LMI.MT.GOV


myth: montana ranked last among states in per capita...

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