What’s Happening onMain Street Montana

Main Street Montana Project RoundtableFort Belknap, Montana

July 25, 2013

iClicker Question

Bobcats or Grizzlies? Or Other?

A. BobcatsB. GrizzliesC. Other

iClicker use donated by the Economic Research Center, Montana State University - Billings

iClicker Questions

What is your gender?

A. Female

B. Male

iClicker Question

What is your role in Montana’s economy?

A. Business owner

B. Tribal government

C. Educator or student

D. Healthcare or non-profit

E. Other

2007

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2007

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2007

.3

2007

.4

2008

.1

2008

.2

2008

.3

2008

.4

2009

.1

2009

.2

2009

.3

2009

.4

2010

.1

2010

.2

2010

.3

2010

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2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Montana and U.S. Personal Income Growth

Source: Quarterly Personal Income, Bureau of Economic Analysis, U.S. Dept. of Commerce. 37 th in 2012, excludes DC.

U.S.Montana

12th Fastest Personal Income Growth since Depth

of Recession

5th Fastest in Last Year

37th Highest Personal Income Per Capita

Stock Market Crash

Euro Debt Crisis

Debt Ceiling Debate

Fiscal Cliff andPayroll Tax Cut Expiry

Jan-07

Apr-07Jul-0

7

Oct-07

Jan-08

Apr-08Jul-0

8

Oct-08

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-1390.0%

92.0%

94.0%

96.0%

98.0%

100.0%

102.0%

Payroll Employment Nearly Recovered(Indexed to Peak Employment)

Source: Current Employment Statistics, April 2013 preliminary. Peak employment for Montana occurred in March 2008. U.S. indexed to Jan. 2008 peak. Great Falls to Montana peak in March 2008.

Montana

U.S.

Employment Growth on Reservation Areas Compared to Montana

Source: Employment on Montana Reservation Data, Research and Analysis Bureau, Montana Department of Labor and Industry, based on QCEW data. 2012 Reservation Employment Estimate developed from LAUS.

Montana

Indian Country

2007 2008 2009 2010 2011 2012

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Perc

ent J

ob C

hang

e ov

er P

rior Y

ear

Estimate

193

10,474

1,184

935204214

-460

-2,335

-16,025

7,605

3,495

2007 2008 2009 2010 2011 2012

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Perc

ent J

ob C

hang

e ov

er P

rior Y

ear

Employment Growth on Reservation Areas Compared to Montana

Source: Employment on Montana Reservation Data, Research and Analysis Bureau, Montana Department of Labor and Industry

MT Private Employment

Indian Country

MT Public Employment

iClicker Question

What area are you from?

A. Northern Cheyenne or Crow ReservationB. Flathead or Blackfeet ReservationC. Fort Belknap or Rocky Boy ReservationD. Fort Peck ReservationE. Non-reservation area

Employment on Reservation Areas

Fort Belknap Rocky Boy Northern Cheyenne

Crow Blackfeet Fort Peck Flathead0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2006 2007 2008 2009 2010 2011

Source: Reservation Employment Estimates, Research and Analysis Bureau, Montana Department of Labor and Industry

Job Gains in

2011

Job Losses in

2010

Employment by Employer Class

Montana Flathead Crow Fort Peck Northern Cheyenne

Blackfeet Rocky Boy's Fort Belknap0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

71%63%

45% 40%32% 31% 26% 21%

18%25%

48%45% 62%

55% 67%67%

10% 12% 7% 15% 7%9%

5%8%

5.3% 2.1% 4.3%

Self- Em-ployed

Private

PrivatePrivate

Private

PrivatePrivatePrivate Private

Public

PublicPublic Public

Public

Public

PublicPublic

Self Employed Unpaid Family Members

Source: American Community Survey, 2007-2011. Figures below labels are total employment.

477,082 3,4292,356 3,964 7419691,443

11,268

0

2

4

6

8

10

12

0

1

Unem

ploy

men

t Rat

e

7.6%

5.4%

Montana and U.S. Unemployment Rate

Source: Local Area Unemployment Statistics from MT DLI and the Current Population Survey from BLS. 12 th lowest from Annual 2012.

Montana

U.S.• Montana has the 12th lowest

unemployment rate in the U.S.

2008 2009 2010 2011 2012

-5%

0%

5%

10%

15%

20%

25%

30%

Fort Peck

FlatheadFort

Belknap

Crow

Northern Cheyenne

Rocky Boy’sBlack-

feet

Reservation Annual Unemployment Rates

Source: Reservation unemployment rates, MT Dept. of Labor and Industry, Research and Analysis Bureau.

Montana

iClicker Question

How do you feel our economy is performing right now?

A. Montana is rocking it!

B. Doing pretty good, but room for improvement.

C. Ho hum. The economy isn’t good, but it’s not bad.

D. Some people are doing ok, but not the rest of us.

E. Statistics are lies. It’s rough out there.

Rough out there Not Great Not Good, Not Bad Pretty Good Rocking it0%

10%

20%

30%

40%

50%

60%

70%

Perc

ent o

f Res

pond

ents

Responses to CurrentEconomic Performance Question

Billings

Miles City

Great Falls

Bozeman

Missoula

Regional and Reservation Unemployment 2012

Source: Montana Dept. of Labor and Industry Reservation Unemployment Rates, 2012, and Local Area Unemployment Statistics, BLS and MTDLI.

Understanding Unemployment Rates

MT Dept. of Labor Census Bureau Bureau of Indian Affairs

Published Annually, but uses monthly data

Annually, covers multiple years Last published in 2005

CalculatedProrated employment based

on zip code from multiple sources

Survey-based data Survey and tribal information

Includes People on reservation working or looking for work

Residents of reservation working or

looking for work, (armed forces at state

level)

Tribal members 16-65 years, not disabled or

incarcerated

Purpose Comparability to state and county unemployment rates

Data on race and geography

One figure to measure economic status of tribe

Fort Belknap Rate 16.5% 19.8% 68.5%

Department of Labor Unemployment Rates

Source: Data compiled by MT Dept. of Labor, Research and Analysis based on American Community Survey micro data from 2009-2011 available through data ferret. Percentages are of full civilian population.

Employed60%

Unemployed5%

Disabled4%

Unknown4%

Early Retirement2%

Family Caretakers5%

In School5%

65 and Older15%

Under 16 Not In-cluded

Labor Force Participation Rate = 65%

Folks must be looking for work to be considered

unemployed.

Differences between Labor and BIA Unemployment rates

Source: Data compiled by MT Dept. of Labor, Research and Analysis based on American Community Survey micro data from 2009-2011 available through data ferret. Percentages are of full civilian population.

Employed

UnemployedDisabled

UnknownEarly Retirement

Family Caretakers

In School

Under 16 Not In-cluded

1. BIA only includes tribal members.

65 and Older not Included

2. 65 and Older not included.

3. All others not working are considered unemployed in-stead of not in labor force.

Labor Force Participation on Reservation Areas

Montana 507,565

Fort Peck 3,873

Flathead 11,918

Fort Belknap

881

Blackfeet 4,482

Rocky Boy's 1,207

Northern Cheyenne

1,653

Crow 3,2770%

10%

20%

30%

40%

50%

60%

70%

64.0%

57.6%55.2%

45.7%

60.1%57.1% 55.8%

66.5%

Labo

r For

ce P

artic

ipati

on R

ate

Source: American Community Survey, 2007-2011. Figures below labels are total labor force.

2011 Average Annual Wage by Geography

Flathead Fort Peck Northern Cheyenne

Blackfeet Crow Montana Rocky Boy Fort Belknap

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$30,820 $31,440 $33,269

$35,097 $35,604 $35,791

$42,206 $42,558

Source: Quarterly Census of Employment and Wages, plus reservation data by Research and Analysis Bureau, Montana Department of Labor and Industry

7,970 Employed

1,428 Employed

3,231 Employed

1,021 Employed

2,241 Employed

2,721 Employed

348 Employed

422,726 Employed

2006 2007 2008 2009 2010 2011 2012 $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$30,596 $32,224

$33,305 $33,762 $34,596 $35,791

$37,100

Montana Average Annual Wages

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

2006 2007 2008 2009 2010 2011 2012 $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

0%

1%

2%

3%

4%

5%

6%

Wag

es

Wag

e Gr

owth

and

Infla

tion

Montana Average Annual Wages

Source: Quarterly Census of Employment and Wages, BLS, and MT DLI. 4 th and 2rd determined by 2012 QCEW, 41st by Occupational Employment Statistics, 2012.

WAGE GROWTH

2ndFastest Private Wage

Growth Last Year

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?

• How are we different from other state’s economies?

Comparative Industry Private Employment: U.S. and Montana

Source: Quarterly Census of Employment and Wages, 2011 Private Employers only.

Utilties

Education

Ag

Mining

Transportation

Manufacturing

Professional Services

Admin and Waste Services

Financial Activities

Construction

Other

Leisure Activities

Health Care

Trade

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

MTUS

Employment by Industry

Montana Blackfeet Crow Flathead Fort Belknap Fort Peck Northern Cheyenne

Rocky Boy's0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Public Admin

Public Admin

Public Admin

Public Admin

Public Admin

Public Admin

Public Admin Public

AdminOther Other

Other

Other

Leisure Activities

Leisure Activities

Leisure

Leisure Leisure Leisure

Leisure

Leisure

Business Services

Business Services

Business Services Business Services Business Services

Education and

Health Care

Education and

Health Care

Education and

Health CareEducation

and Health Care

Education and

Health Care Education and

Health Care

Education and

Health CareEducation

and Health Care

Trade TradeTrade

Trade

Trade

Trade

Trade

TradeManufacturing Manufacturing

Manufacturing

Construction

ConstructionConstruction

ConstructionConstruction

ConstructionConstruction

Financial Activities Financial

Financial Activities Financial

Ag and Mining

Transporta-tion

Transporta-tionTransporta-

tion

Ag and Mining

Ag and Mining

Transportation Transportation

Source: American Community Survey, 2007-2011.

iClicker Question

What industry do you represent?

A. Wholesale or retail trade

B. Government

C. Healthcare

D. Education

E. Other

Location and Count of American Indian Owned Businesses

Comparison to Other States

2.0% 1.6%

2.2%0.8%

0.8%

American Indian and

Alaska Native Share of

Population

SD = 10.0%MT = 7.8%ND = 6.2%WY = 3.8%ID = 2.4%

Source: 2007-2011 American Community Survey

Take Away Points

• Montana and Reservations are more concentrated in Government than the U.S.

• Montana has a higher level of American Indian-owned firms than other states, but not yet proportional to population.

• Each reservation has a different industry mix – regional differences are important to economic planning.

• What does economic theory say about economic development?

Economic Concept Map

Output

Labor

Capital Technology

Other Inputs

• Assets and Savings• Machines and Plants• Productive Equipment

• Workers• Human Capital• Education and Training

• Process that combines Labor, Capital, and Inputs

• Work smarter, not harder• Efficiency of production

• Other inputs needed to produce a firms output

Role of Capital in Economy

• Equipment needed to produce output.

• Replace deteriorating equipment.

• Enhance worker productivity by upgrading equipment.

Role of Capital in Economy

• Equipment needed to produce output.

• Replace deteriorating equipment.

• Enhance worker productivity by upgrading equipment.

• Provide enhanced ability to spend in the future.

• Assets to borrow against.

• Savings for future consumption.

IncreaseCurrent

Production

Increase Potential

Production

How to Increase Capital

1. Increase Dollars Entering Economy– Exports

Montana Foreign Exports

Source: Exports including services from the Brookings-Rockefeller Project on State and Metropolitan Innovation.

Agricul-ture, Food and Bev-

erage Manufac-

turing20%

Other2%

Travel and Tourism14%

Forestry, Wood

Products, and Fur-niture

4%

Machinery, Transportation Equipment, and Fabricated Met-

als4%

Com-puter,

Medical, Telecom

4%

Business and Fi-nancial

Services13%

Freight and Port Ser-

vices6%

Royalties4%

Coal, Oil and GasProd-ucts13%

Mining, Metals, and Chemical

Manufacturing16%

How to Increase Capital

1. Increase Dollars Entering Economy– Exports

2. Retain Dollars Within Community– Develop local businesses to provide goods and services

Retaining Dollars Within Community

Source: Dollar figures represent expenditures made on reservations by government institutions, including funds raised by federal, state, nonprofit, and earned income sources. Preliminary data compiled by the Census and Economic Information Center, MT Dept. of Commerce, FY2009.

$162 M

$313 M

$80 M

$164 M

$105 M$156 M

Exports

Exports

$80 M

Retaining Dollars Within Community

Source: Preliminary data compiled by the Census and Economic Information Center, MT Dept. of Commerce, FY2009.

$80 M

Exports

Money Leaves

Retained Money

Recirculates to Create Jobs

How to Increase Capital

1. Increase Dollars Entering Economy– Exports

2. Retain Dollars Within Community– Develop local businesses to provide goods and services

3. Increase Savings Rates– Invest funds in productive ways to build asset base and grow output

Importance of Saving and Capital Stock

OUTPUT

More Output

LessOutput

Savings and InvestmentLess Savings and

InvestmentMore Savings and

Investment

Low Savings =

Low Output

Solow Economic Growth Model

High Savings =

High OutputEconomic Growth Not

Possible without

Investment

Other Variables also Important

OUTPUT

More Output

LessOutput

Savings and InvestmentLess Savings and

InvestmentMore Savings and

Investment

Solow Economic Growth Model

Growth Path Can Shift Upwards by:• Increasing population growth rates

(more labor)• Improving technology

• Improving institutions (reduced costs)

How to Increase Capital

1. Increase Dollars Entering Economy– Exports

2. Retain Dollars Within Community– Develop local businesses to provide goods and services

3. Increase Savings Rates– Invest funds in productive ways to build asset base and grow output

4. Improve Access to Financing– Legal system improvement– Community banks or other financial institutions

Access to Financing

Economic Development Concept Map

iClicker Question

What aspect of economic development is most important?

A. Reducing transportation costs

B. Increasing capital availability

C. Improving our labor force

D. Improving innovation and technology diffusion

E. Other

Full Report Available atwww.lmi.mt.gov

Barbara Wagner,Chief Economist

Montana Department of Labor and Industry406-444-5474

bwagner@mt.gov