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What’s Happening on Main Street Montana
Main Street Montana Project Presentation Given at the League of Cities and Towns Conference at the Red Lion
Helena, Montana October 10, 2013
Montana is #5 for Personal Income Growth in 2012
Yet, are still 37th out of 50 for per capita income.
12th Fastest Growth
Since Start of
Recession
Montana Ranked #3 for Employment Growth in 2012
0
1
0
2
4
6
8
10
12
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Une
mpl
oym
ent R
ate
7.3%
5.3%
Montana and U.S. Unemployment Rate
Source: Local Area Unemployment Statistics from MT DLI and the Current Population Survey from BLS. 11th lowest from August2013.
Montana
U.S. • Montana has the 11th lowest unemployment rate in the U.S.
$32,224
$35,791 $37,100
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
2006 2007 2008 2009 2010 2011 2012
Wag
es
Montana Average Annual Wages
Source: Quarterly Census of Employment and Wages, BLS, and MT DLI
-1%
0%
1%
2%
3%
4%
5%
6%
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
2006 2007 2008 2009 2010 2011 2012
Wag
e G
row
th a
nd In
flatio
n
Wag
es
Montana Average Annual Wage Growth Has Outpaced Inflation
Source: Quarterly Census of Employment and Wages, BLS, and MT DLI
INFLATION WAGE GROWTH
0%
1%
2%
3%
4%
5%
6%
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
2006 2007 2008 2009 2010 2011 2012
Wag
e G
row
th a
nd In
flatio
n
Wag
es
Montana Average Annual Wages
Source: Quarterly Census of Employment and Wages, BLS, and MT DLI. 4th and 2rd determined by 2012 QCEW, 41st by Occupational Employment Statistics, 2012.
WAGE GROWTH
2nd Fastest Private Wage
Growth Last Year
Yet, 47th Highest Average Annual Wage
41st Hourly
Take Away Points
• Montana’s economy is growing quickly, • Faster income growth, • Faster job growth, • Faster wage growth, and • Lower unemployment than the nation.
• But we have a long way to go. • What are we doing right? • What do we need to work on?
• Let’s focus on wages.
Industry Composition of U.S. and MT Economies (by GDP)
Government Government
Leisure Activities Leisure Activities All Other
All Other
Health Care and Education
Health Care and Education
Business Services Business Services
Financial Services Financial Services
Transportation and Utilities
Retail and Wholesale Trade
Retail and Wholesale Trade
Manufacturing Manufacturing
Construction
Construction
Mining Mining
Agriculture Agriculture
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
US MT
Transportation and Utilities
Source: Bureau of Economic Analysis, Gross Domestic Product 2011.
Comparative Industry Private Employment: US and MT
Source: Quarterly Census of Employment and Wages, 2011 Private Employers only.
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Utilties
Education
Ag
Mining
Transportation
Manufacturing
Professional Services
Admin and Waste Services
Financial Activities
Construction
Other
Leisure Activities
Health Care
Trade
MT US
Montana Personal Income by Industry Since 1930
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1930 1940 1950 1960 1970 1980 1990 2000 2010
Mining
Wholesale And Retail Trade
Government
Services
Health Services
Farm Earnings and Agriculture
Manufacturing Construction
Transportation and Utilities
Other Services
Source: Bureau of Economic Analysis, Personal Income from 1930, SICs to NAICS conversion compiled by the Montana Department of Labor and Industry Research and Analysis Bureau.
Industry Mix Compared to U.S.
• Roughly equal in good-producing industries, but less manufacturing.
• Larger government, health care, and tourism.
• Smaller financial and business services.
• Industry mix doesn’t explain lower wages.
Wages and Productivity
Source: Wages from Quarterly Census of Employment and Wages, 2012 annual. GSP and employment from the Bureau of Economic Analysis and average hours from the Current Employment Statistics. Calculated by MT DLI R&A.
Wages
Labor Productivity
New
Yor
k Co
nnec
ticut
M
assa
chus
etts
N
ew Je
rsey
Ca
lifor
nia
Mar
ylan
d Ill
inoi
s W
ashi
ngto
n De
law
are
Virg
inia
Al
aska
Te
xas
Colo
rado
M
inne
sota
Pe
nnsy
lvan
ia
New
Ham
pshi
re
Mic
higa
n Rh
ode
Isla
nd
Geo
rgia
N
orth
Dak
ota
Arizo
na
Wyo
min
g O
rego
n O
hio
Tenn
esse
e N
evad
a Ha
wai
i Lo
uisi
ana
Flor
ida
Nor
th C
arol
ina
Mis
sour
i Al
abam
a W
isco
nsin
O
klah
oma
Uta
h In
dian
a Ka
nsas
Ve
rmon
t N
ew M
exic
o Ke
ntuc
ky
Iow
a W
est V
irgin
ia
Sout
h Ca
rolin
a N
ebra
ska
Mai
ne
Arka
nsas
M
onta
na
Sout
h Da
kota
Id
aho
Mis
siss
ippi
0
10
20
30
40
50
60
70
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Labo
r Pro
duct
ivity
(GSP
per
wor
ker h
our)
Aver
age
Wag
e
Montana’s Aging Population
Source: Census and Economic Information Center, MT Dept. of Commerce, April 2013
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2000 2005 2010 2015 2020 2025 2030
Under 20 20 to 64 Over 65
Output (GDP)
Physical Inputs
Labor Capital
Productivity Defined
Productivity: the “recipe” used to combine labor, capital (equipment), and inputs together to make output.
• Measured by labor in states. • Does NOT mean workers are lazy. • Recently, it is a factor of
technology. • Work smarter, not harder.
Output (GDP)
Physical Inputs
Labor Capital
Productivity Defined
Output (GDP)
Physical Inputs
Labor
Capital
High Productivity Low Productivity
Factors Influencing Productivity
• Education
Productivity and Education
Source: Education attainment from 2009-2011 ACS, U.S. Census. GSP and employment from the Bureau of Economic Analysis and average hours from the Current Employment Statistics. Calculated by MT DLI R&A.
Mas
sach
uset
ts
Colo
rado
M
aryl
and
Conn
ectic
ut
New
Jers
ey
Virg
inia
Ve
rmon
t N
ew H
amps
hire
N
ew Y
ork
Min
neso
ta
Was
hing
ton
Illin
ois
Rhod
e Is
land
Ca
lifor
nia
Kans
as
Uta
h Ha
wai
i O
rego
n De
law
are
Mon
tana
N
ebra
ska
Mai
ne
Geo
rgia
Al
aska
Pe
nnsy
lvan
ia
Nor
th D
akot
a N
orth
Car
olin
a Ar
izona
W
isco
nsin
Te
xas
Sout
h Da
kota
Fl
orid
a M
isso
uri
New
Mex
ico
Iow
a O
hio
Idah
o W
yom
ing
Sout
h Ca
rolin
a Te
nnes
see
Okl
ahom
a In
dian
a N
evad
a Al
abam
a Lo
uisi
ana
Kent
ucky
M
issi
ssip
pi
Arka
nsas
M
ichi
gan
Wes
t Virg
inia
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Popu
latio
n 25
and
Old
er w
ith B
ache
lor's
Educational Attainment
Productivity and Education
Source: Education attainment from 2009-2011 ACS, U.S. Census. GSP and employment from the Bureau of Economic Analysis and average hours from the Current Employment Statistics. Calculated by MT DLI R&A.
Mas
sach
uset
ts
Colo
rado
M
aryl
and
Conn
ectic
ut
New
Jers
ey
Virg
inia
Ve
rmon
t N
ew H
amps
hire
N
ew Y
ork
Min
neso
ta
Was
hing
ton
Illin
ois
Rhod
e Is
land
Ca
lifor
nia
Kans
as
Uta
h Ha
wai
i O
rego
n De
law
are
Mon
tana
N
ebra
ska
Mai
ne
Geo
rgia
Al
aska
Pe
nnsy
lvan
ia
Nor
th D
akot
a N
orth
Car
olin
a Ar
izona
W
isco
nsin
Te
xas
Sout
h Da
kota
Fl
orid
a M
isso
uri
New
Mex
ico
Iow
a O
hio
Idah
o W
yom
ing
Sout
h Ca
rolin
a Te
nnes
see
Okl
ahom
a In
dian
a N
evad
a Al
abam
a Lo
uisi
ana
Kent
ucky
M
issi
ssip
pi
Arka
nsas
M
ichi
gan
Wes
t Virg
inia
0
10
20
30
40
50
60
70
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Labo
r Pro
duct
ivity
(GSP
per
wor
ker h
our)
Popu
latio
n 25
and
Old
er w
ith B
ache
lor's
Educational Attainment
Labor Productivity
Montana’s labor productivity is lower than expected given education levels.
Factors Influencing Productivity
• Education
• Experience in job
• Job Matching
• Industry Mix
• Urban concentration
• Spread of best practices and innovative methods
• Use of technology
Use of Technology (measured in percent of workers in IT fields)
Source: Occupational Employment Statistics, 2012. Employment in 11-3021 and 15-0000 as percent of total employment.
Virg
inia
W
ashi
ngto
n M
assa
chus
etts
M
aryl
and
Colo
rado
De
law
are
New
Jers
ey
Calif
orni
a M
inne
sota
N
ew H
amps
hire
Co
nnec
ticut
Ar
izona
M
isso
uri
Uta
h G
eorg
ia
Texa
s Rh
ode
Isla
nd
Nor
th C
arol
ina
Neb
rask
a N
ew Y
ork
Ore
gon
Illin
ois
Ohi
o M
ichi
gan
Penn
sylv
ania
Ve
rmon
t W
isco
nsin
Ka
nsas
Fl
orid
a Al
abam
a Io
wa
Idah
o N
ew M
exic
o N
orth
Dak
ota
Indi
ana
Sout
h Ca
rolin
a Te
nnes
see
Alas
ka
Arka
nsas
Ke
ntuc
ky
Mai
ne
Okl
ahom
a Ha
wai
i M
onta
na
Sout
h Da
kota
W
est V
irgin
ia
Nev
ada
Loui
sian
a W
yom
ing
Mis
siss
ippi
0
10
20
30
40
50
60
70
0%
1%
2%
3%
4%
5%
6%
7%
Labo
r Pro
duct
ivity
(GSP
/Wor
ker H
our)
Perc
ent o
f Wor
kfor
ce in
IT o
ccup
atio
ns
Factors Influencing Productivity
• Education
• Experience in job
• Job Matching
• Industry Mix
• Urban concentration
• Spread of best practices and innovative methods
• Use of technology
• Business Size
Montana has High Rates of Entrepreneurialism
Source: Kaufman Foundation, 2012. Employer statistics from Business Employment Dynamics, 2010Q2 - 2012Q3, Bureau of Labor Statistics. Percent of Households from Current Population Survey, 2009-2012. Analysis by MT Dept of Labor and Industry
• #3 for Percent of Households owning a Business
• #6 for Employer Startups
• #15 for Net Employer Startups
Montana Ranks Among States
Job Performance of New Firms Started Since 2007 by Size
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2007 2008 2009 2010 2011 2012 (3 Quarters)
Jobs
Add
ed
New Firms of 50 or More Employees
20 to 50 Employees 10 to 19 Employees
5 to 9 Employees Fewer than 5 Employees
Source: Research and Analysis Bureau, MT Dept of Labor, using QCEW micro data.
0%
10%
20%
30%
40%
50%
60%
70%
Fewer than5
5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 andover
Perc
ent o
f Mon
tana
Em
ploy
ers
Smaller Business Larger Business
Montana has Lots of Small Businesses, but Large Business Provide the Jobs and Wages
ESTABLISHMENTS
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW), 2012
0%
10%
20%
30%
40%
50%
60%
70%
Fewer than5
5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 andover
Perc
ent o
f Mon
tana
Em
ploy
ers
Smaller Business Larger Business
Montana has Lots of Small Businesses, but Large Business Provide the Jobs and Wages
EMPLOYMENT WAGES
ESTABLISHMENTS
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW), 2012
Large Businesses Provide Higher Pay and Benefits
Source: Quarterly Census and Employment and Wages and Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2011 Medical Expenditure Panel Survey-Insurance Component.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
10,000
20,000
30,000
40,000
50,000
60,000
Fewer than 5 5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 to 499
Perc
ent o
f Firm
s Offe
ring
Insu
ranc
e
Aver
age
Wag
e
Average Wage Providing Insurance
Factors Influencing Productivity
• Education
• Experience in job
• Job Matching
• Industry Mix
• Urban concentration
• Spread of best practices and innovative methods
• Use of technology
• Business Size
Economic Development Concept Map
Full Report Available at www.mainstreetmontanaproject.com
Barbara Wagner, Chief Economist
Montana Department of Labor and Industry 406-444-5474
Responses to Survey by County
SURVEY LINK
Take the survey at www.mainstreetmontanaproject.com/survey