what’s happening on main street montana main street montana project presentation given at the...
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What’s Happening onMain Street Montana
Main Street Montana Project PresentationGiven at the League of Cities and Towns Conference at the Red Lion
Helena, MontanaOctober 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
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
2
4
6
8
10
12
0
1
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. 11 th lowest from August2013.
Montana
U.S.• Montana has the 11th lowest unemployment rate in the U.S.
2006 2007 2008 2009 2010 2011 2012 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$32,224
$35,791 $37,100
Wag
es
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
-1%
0%
1%
2%
3%
4%
5%
6%
Wag
es
Wag
e G
row
th a
nd In
flatio
n
Montana Average Annual Wage Growth Has Outpaced Inflation
Source: Quarterly Census of Employment and Wages, BLS, and MT DLI
INFLATION WAGE GROWTH
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 G
row
th a
nd In
flatio
n
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
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)
US MT0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Government Government
Leisure ActivitiesLeisure ActivitiesAll Other
All Other
Health Care and Ed-ucation
Health Care and Ed-ucation
Business Services Business Services
Financial ServicesFinancial Services
Retail and Wholesale Trade
Retail and Wholesale Trade
ManufacturingManufacturing
Construction
Construction
MiningMining
Agriculture Agriculture
Transportation and Utili-ties
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.
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
Montana Personal Income by Industry Since 1930
1930 1940 1950 1960 1970 1980 1990 2000 20100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mining
Wholesale And Retail Trade
Government
Services
Health Services
Professional and Technical ServicesFarm Earnings and Agriculture
Manufacturing
Construction
Transportation and Utilities
Finance and Real Es-tate
Leisure Activities
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
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
10
20
30
40
50
60
70N
ew Y
ork
Conn
ectic
utM
assa
chus
etts
New
Jers
eyCa
lifor
nia
Mar
ylan
dIll
inoi
sW
ashi
ngto
nD
elaw
are
Virg
inia
Ala
ska
Texa
sCo
lora
doM
inne
sota
Penn
sylv
ania
New
Ham
pshi
reM
ichi
gan
Rhod
e Is
land
Geo
rgia
Nor
th D
akot
aA
rizo
naW
yom
ing
Ore
gon
Ohi
oTe
nnes
see
Nev
ada
Haw
aii
Loui
sian
aFl
orid
aN
orth
Car
olin
aM
isso
uri
Ala
bam
aW
isco
nsin
Okl
ahom
aU
tah
Indi
ana
Kans
asVe
rmon
tN
ew M
exic
oKe
ntuc
kyIo
wa
Wes
t Vi
rgin
iaSo
uth
Caro
lina
Neb
rask
aM
aine
Ark
ansa
sM
onta
naSo
uth
Dak
ota
Idah
oM
issi
ssip
pi
Ave
rage
Wag
e
Labo
r Pro
ducti
vity
(GSP
per
wor
ker h
our)
Montana’s Aging Population
Source: Census and Economic Information Center, MT Dept. of Commerce, April 2013
2000 2005 2010 2015 2020 2025 2030 -
100,000
200,000
300,000
400,000
500,000
600,000
700,000 Under 20 20 to 64 Over 65
Working-age population levels out after
2015.
Workers must become more productive to
maintain economic growth.
Output (GDP)
PhysicalInputs
LaborCapital
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)
PhysicalInputs
LaborCapital
Productivity Defined
Output (GDP)
PhysicalInputs
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.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Mas
sach
usett
sCo
lora
doM
aryl
and
Conn
ectic
utN
ew Je
rsey
Virg
inia
Verm
ont
New
Ham
pshi
reN
ew Y
ork
Min
neso
taW
ashi
ngto
nIll
inoi
sRh
ode
Isla
ndCa
lifor
nia
Kans
asU
tah
Haw
aii
Ore
gon
Del
awar
eM
onta
naN
ebra
ska
Mai
neG
eorg
iaA
lask
aPe
nnsy
lvan
iaN
orth
Dak
ota
Nor
th C
arol
ina
Ari
zona
Wis
cons
inTe
xas
Sout
h D
akot
aFl
orid
aM
isso
uri
New
Mex
ico
Iow
aO
hio
Idah
oW
yom
ing
Sout
h Ca
rolin
aTe
nnes
see
Okl
ahom
aIn
dian
aN
evad
aA
laba
ma
Loui
sian
aKe
ntuc
kyM
issi
ssip
piA
rkan
sas
Mic
higa
nW
est
Virg
iniaPo
pula
tion
25 a
nd O
lder
wit
h Ba
chel
or'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.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
10
20
30
40
50
60
70
Mas
sach
usett
sCo
lora
doM
aryl
and
Conn
ectic
utN
ew Je
rsey
Virg
inia
Verm
ont
New
Ham
pshi
reN
ew Y
ork
Min
neso
taW
ashi
ngto
nIll
inoi
sRh
ode
Isla
ndCa
lifor
nia
Kans
asU
tah
Haw
aii
Ore
gon
Del
awar
eM
onta
naN
ebra
ska
Mai
neG
eorg
iaA
lask
aPe
nnsy
lvan
iaN
orth
Dak
ota
Nor
th C
arol
ina
Ari
zona
Wis
cons
inTe
xas
Sout
h D
akot
aFl
orid
aM
isso
uri
New
Mex
ico
Iow
aO
hio
Idah
oW
yom
ing
Sout
h Ca
rolin
aTe
nnes
see
Okl
ahom
aIn
dian
aN
evad
aA
laba
ma
Loui
sian
aKe
ntuc
kyM
issi
ssip
piA
rkan
sas
Mic
higa
nW
est
Virg
iniaPo
pula
tion
25 a
nd O
lder
wit
h Ba
chel
or's
Labo
r Pro
ducti
vity
(GSP
per
wor
ker h
our)
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.
0%
1%
2%
3%
4%
5%
6%
7%
0
10
20
30
40
50
60
70
Virg
inia
Was
hing
ton
Mas
sach
usett
sM
aryl
and
Colo
rado
Del
awar
eN
ew Je
rsey
Calif
orni
aM
inne
sota
New
Ham
pshi
reCo
nnec
ticut
Ari
zona
Mis
sour
iU
tah
Geo
rgia
Texa
sRh
ode
Isla
ndN
orth
Car
olin
aN
ebra
ska
New
Yor
kO
rego
nIll
inoi
sO
hio
Mic
higa
nPe
nnsy
lvan
iaVe
rmon
tW
isco
nsin
Kans
asFl
orid
aA
laba
ma
Iow
aId
aho
New
Mex
ico
Nor
th D
akot
aIn
dian
aSo
uth
Caro
lina
Tenn
esse
eA
lask
aA
rkan
sas
Kent
ucky
Mai
neO
klah
oma
Haw
aii
Mon
tana
Sout
h D
akot
aW
est
Virg
inia
Nev
ada
Loui
sian
aW
yom
ing
Mis
siss
ippi
Perc
ent o
f Wor
kfor
ce in
IT o
ccup
ation
s
Labo
r Pro
ducti
vity
(GSP
/Wor
ker H
our)
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
2007 2008 2009 2010 2011 2012 (3 Quarters)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Jobs
Add
ed
New Firms of50 or More Employees
20 to 50 Employees10 to 19 Employees
5 to 9 EmployeesFewer than 5 Employees
Source: Research and Analysis Bureau, MT Dept of Labor, using QCEW micro data.
Fewer than 5
5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 and over
0%
10%
20%
30%
40%
50%
60%
70%
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
Fewer than 5
5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 and over
0%
10%
20%
30%
40%
50%
60%
70%
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
EMPLOYMENTWAGES
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.
Fewer than 5
5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 to 4990
10,000
20,000
30,000
40,000
50,000
60,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Ave
rage
Wag
e
Perc
ent
of F
irm
s O
ffer
ing
Insu
ranc
e
Average WageProviding 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 atwww.mainstreetmontanaproject.com
Barbara Wagner,Chief Economist
Montana Department of Labor and Industry406-444-5474
Responses to Survey by County
SURVEY LINK
Take the survey at www.mainstreetmontanaproject.com/surve
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