1 Opportunities and Challenges Presented to: Wyoming Associated Builders Annual Meeting February 29, 2008 Parkway Plaza Hotel & Convention Center By Doug.

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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

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Today’s Presentation

Population and Workforce TrendsNational and Global Market ForcesHousing InfrastructureWhy discuss housing last?

Wyoming Department of Employment, Research & Planning

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Population and Workforce Trends

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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


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Wyoming Needs Nonresident Workers!


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Resident Labor Supply Exhausted!


Domestic = Resident

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On the Road in Wyoming

Source: Casper Star Tribune


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Source: D. Leonard, Wyoming Commuting Pattern Data Model, Unpublished Run, February 21, 2008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

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2002Q

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2002Q

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2002Q

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2002Q

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2006Q

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2006Q

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2007Q

1

2007Q

2

Date

Infl

ow

WY

CA

CO

TX

UT

MT

SD

ID

MI

NE

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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


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Nonresident Workers Come to Wyoming, But Don’t Stay!

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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?

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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


EXODUS OF THE YOUNG!

Source: Nurses in Wyoming; Demand, Retention, & Supply (http://doe.state.wy.us/lmi/presentations/HealthCare0907.pdf)

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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


EXODUS OF THE YOUNG CONTINUES!

Source: Nurses in Wyoming; Demand, Retention, & Supply (http://doe.state.wy.us/lmi/presentations/HealthCare0907.pdf)

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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


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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)


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The Demographic

Sledgehammer!

Source: U.S. Census Bureau (http://www.census.gov/population/projections/SummaryTabB1.xls)

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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?


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National and Global Market Forces:Wyoming is NOT immune to their effects

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Food for Thought:

Who influences Wyoming’s economic destiny?


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CHINA

INDIA

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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


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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?


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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


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Housing Infrastructure

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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’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

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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?


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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


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Questions?


1 Opportunities and Challenges Presented to: Wyoming Associated Builders Annual Meeting February 29, 2008 Parkway Plaza Hotel & Convention Center By Doug.

Documents

research planning slide

wyoming source

wyoming demand

resident slide

uslmi slide

effects slide

research planning domestic

research planning exodus