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1
Opportunities and ChallengesPresented to:
Wyoming Associated Builders Annual MeetingFebruary 29, 2008
Parkway Plaza Hotel & Convention CenterBy
Doug LeonardSenior Economist
Wyoming Department of EmploymentResearch & Planning
(307) [email protected]
http://doe.state.wy.us/lmi
2
Today’s Presentation
Population and Workforce TrendsNational and Global Market ForcesHousing InfrastructureWhy discuss housing last?
Wyoming Department of Employment, Research & Planning
3
Population and Workforce Trends
4
Figure: Over the Year Employment Change for Wyoming, Neighboring States, and the US, 1999-2007Q3
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
1999
2000
2001
2002
2003
2004
2005
2006
2007
Q1
2007
Q2
2007
Q3
Year
Over
th
e Y
ear
Ch
ange
Wyoming Neighboring States USData Sources: United States Department of Commerce,
Bureau of Labor Statistics
Neighboring states include Colorado,
Idaho, Montana, Nebraska, South Dakota,
and Utah
Wyoming Department of Employment, Research & Planning
5
Wyoming Needs Nonresident Workers!
Wyoming Department of Employment, Research & Planning
6
Resident Labor Supply Exhausted!
Wyoming Department of Employment, Research & Planning
Domestic = Resident
7
On the Road in Wyoming
Source: Casper Star Tribune
Wyoming Department of Employment, Research & Planning
8
Wyoming Department of Employment, Research & Planning
Source: D. Leonard, Wyoming Commuting Pattern Data Model, Unpublished Run, February 21, 2008
Figure: Top State of Origin Inflows to Wyoming for Workers without Wyoming Driver Licenses
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2000Q
4
2001Q
1
2001Q
2
2001Q
3
2001Q
4
2002Q
1
2002Q
2
2002Q
3
2002Q
4
2003Q
1
2003Q
2
2003Q
3
2003Q
4
2004Q
1
2004Q
2
2004Q
3
2004Q
4
2005Q
1
2005Q
2
2005Q
3
2005Q
4
2006Q
1
2006Q
2
2006Q
3
2006Q
4
2007Q
1
2007Q
2
Date
Infl
ow
WY
CA
CO
TX
UT
MT
SD
ID
MI
NE
9
Over the Year Inflow Change for Workers Without Wyoming Drivers Licenses
-10%
-5%
0%
5%
10%
15%
20%
25%
2001
Q3
2001
Q4
2002
Q1
2002
Q2
2002
Q3
2002
Q4
2003
Q1
2003
Q2
2003
Q3
2003
Q4
2004
Q1
2004
Q2
2004
Q3
2004
Q4
2005
Q1
2005
Q2
2005
Q3
2005
Q4
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
Date
Over
the Y
ear
Infl
ow
Change
Top Ten States of OriginAll Other States of Origin
Source: D. Leonard, Wyoming Commuting Pattern Data Model, Unpublished Run, February 21, 2008
Wyoming Department of Employment, Research & Planning
10
Nonresident Workers Come to Wyoming, But Don’t Stay!
11
The $64 Question: Do we really want new workers to stay?Personal observations of the last “boom”
Are nonresidents welcome in Wyoming? Does Wyoming appear to prefer “disposable
workers”? Come in during the boom When it’s over they leave
Historically, Wyoming appears to only welcome certain types of workers which benefit existing industries
We talk diversification, but do we really want it? What is diversification (define) – allows us to
manage risk (property values) Wyoming more vulnerable to ups/downs of energy
markets What will it cost?
12
Number of 1992 Resident Worker Cohort Age 16-34 Still Working in Wyoming
112,318
94,658
84,24776,875
71,58368,065
0
20,000
40,000
60,000
80,000
100,000
120,000
1992 1993 1994 1995 1996 1997
7.9%
Loss of 44,253 workers in five
years
Wyoming Department of Employment, Research & Planning
EXODUS OF THE YOUNG!
Source: Nurses in Wyoming; Demand, Retention, & Supply (http://doe.state.wy.us/lmi/presentations/HealthCare0907.pdf)
13
Number of 2000 Resident Worker Cohort Age 16-34 Still Working in Wyoming
116,229
96,162
85,57278,899
74,71971,102
0
20,000
40,000
60,000
80,000
100,000
120,000
2000 2001 2002 2003 2004 2005
7.6%
Loss of 45,127 workers in five
years
Wyoming Department of Employment, Research & Planning
EXODUS OF THE YOUNG CONTINUES!
Source: Nurses in Wyoming; Demand, Retention, & Supply (http://doe.state.wy.us/lmi/presentations/HealthCare0907.pdf)
14
Rapid Loss of Younger WorkersWhat will future labor supply look like?Happy about “Hath-Away”?
Students already game the system – market response Use to recruit “moms and dads”?Students train for jobs not available in WY
How do we RETAIN workers?Current strategies focus mainly on attraction No coordinated statewide strategies or policies for retentionNo coordinated statewide strategies or policies designed around family needs once workers arrive
What do they want? Affordable health care/benefits, child care
New labor sourcesJob Corps, corrections systemDisabled, retired or near-retirement workers
Wyoming Department of Employment, Research & Planning
15
Distribution of Employment Growth by Typical Education/ Experience Level for All Industries in Wyoming, 2012
Master's degree2.1%
Doctoral degree0.1%
First professional degree1.6%
Bachelor's plus work experience
4.7%
Associate's degree4.8%
Bachelor's degree7.6%
Postsecondary vocational award
5.0%
Experience in a related occupation
6.6%
Long-term on-the-job training
8.1%
Moderate-term on-the-job training
25.0%
Short-term on-the-job training
34.4%
79.1% of new jobs created in Wyoming between 2002 and 2012 will not require a college degree
Source: Outlook 2010 Revisited: Wyoming’s Labor Market at Mid-Decade (http://doe.state.wy.us/lmi/Occasional/occ4.pdf)
Wyoming Department of Employment, Research & Planning
16
Wyoming Department of Employment, Research & Planning
The Demographic
Sledgehammer!
Source: U.S. Census Bureau (http://www.census.gov/population/projections/SummaryTabB1.xls)
17
What About the Infirmed and the Elderly?(from Nurses in Demand: A Statement of the Problem)
Demographic “Sledgehammer”Medical needs increase with ageMore chronic illness/expensive treatmentsGeography works against us
Dispersed health care delivery
Shortage of Registered Nurses to care for patients
Where do we go from here?
Wyoming Department of Employment, Research & Planning
18
National and Global Market Forces:Wyoming is NOT immune to their effects
19
Food for Thought:
Who influences Wyoming’s economic destiny?
Wyoming Department of Employment, Research & Planning
20
CHINA
INDIA
21
Figure: Monthly Average Opal and Henry Hub Spot Natural Gas Prices and Wyoming Rotary Rig Counts
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Date
Spo
t N
atura
l Gas
Pri
ce ($
/MM
BT
U)
0
12
24
36
48
60
72
84
96
108
120
Rot
ary
Dri
lling
Rig
Cou
nt
Opal Hub Spot Gas Price Henry Hub Spot Gas PriceRotary Rigs
Price Data Source: Intercontinental Exchange 10xGroup (https:/ /www.theice.com/marketdata/naNaturalGas/naNatGasHistory.jsp)
Rotary Rig Count Data Source: Baker Hughes International
Small price differential
Large price differential
Hurricane Katrina Hurricane
Rita
Wyoming Department of Employment, Research & Planning
22
Energy Regulation
Environmental/Safety Concerns Coal-fired power plant construction scuttled Access to California energy markets
Go Nuclear?Alternative energyFuel Economy Standards (C.A.F.E.)Electric cars – where do they get power?
Wyoming Department of Employment, Research & Planning
23
Consequences of High Energy Prices Food Stocks
Wheat: from $3/bushel - $10/bushel Corn (ethanol) – cheaper imports from Brazil not
allowed Livestock Soybeans and other crops (bio-diesel)
Auto Industry Layoffs at Ford, GM and Chrysler
Commodity Competition Alaska Natural Gas Pipeline 4Bcf/day – twice the
capacity of Rockies Express Liquefied Natural Gas Imports (Russia, etc.)
>economies of scale to compete with domestic suppliers
Wyoming Department of Employment, Research & Planning
24
Housing Infrastructure
25
Figure: Wyoming Average Housing Prices, 1997 - 2006
$91,714$96,906
$101,517
$111,437$116,469
$121,140
$132,708
$142,501
$159,776
$115,183$119,843
$122,857
$130,457$132,601
$135,765
$145,429
$152,089
$164,930
$187,869
$70,000
$90,000
$110,000
$130,000
$150,000
$170,000
$190,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Aver
age
Hom
e Sal
e Pri
ce
Wyoming Average (Nominal Dollars) Wyoming Average (2006 Dollars)
Source: Wyoming Housing Database Partnership, "A Profi le of Wyoming Economics and Housing", August 2007, Table I.20
Inflation-adjusted housing prices calculated using Consumer Price Index for All Urban Consumers (CPI-U) from the Bureau of Labor Statistics
Wyoming Department of Employment, Research & Planning
Wyoming’s Median Household Income in 1999 was $37,892 or 37.3% of median home price.
Wyoming’s Median Household Income in 2006 was $47,041 or 25.0% of median home price
Median Income Source: Census Bureau Table H-8. Median Household Income by State: 1984 to 2006 and Table DP-3. Profile of Selected Economic Characteristics: 2000
26
Housing Infrastructure IssuesWhat can be done to address the housing
issue? Current strategy appears to be “make hay while
the sun shines” What if – nonresidents stop coming (regional
labor competition – energy markets)? Not only need housing but also…
Once they get here, why stay? Who bears the risk?
Wyoming Department of Employment, Research & Planning
27
Summary Opportunities We See
Increased revenues/budget surplus New schools Population growth Employment and wage growth
Challenges We Face International competition Young and highly educated people exit the state We can recruit but we cannot retain Rapidly aging population Nursing shortage Urban planning/housing
Wyoming Department of Employment, Research & Planning
28
Questions?
Wyoming Department of Employment, Research & Planning