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What’s Happening on Main Street Montana Main Street Montana Project Roundtable Great Falls, Montana June 12, 2013
What’s Happening onMain Street Montana
Main Street Montana Project RoundtableGreat Falls, Montana
June 12, 2013
Montana and U.S. Personal Income Growth
Source: Quarterly Personal Income, Bureau of Economic Analysis, U.S. Dept. of Commerce. 37 th using 2012 data.
2007
.120
07.2
2007
.320
07.4
2008
.120
08.2
2008
.320
08.4
2009
.120
09.2
2009
.320
09.4
2010
.120
10.2
2010
.320
10.4
2011
.120
11.2
2011
.320
11.4
2012
.120
12.2
2012
.320
12.4
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
U.S.Montana
14th 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
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.
Great Falls
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
2
4
6
8
10
12
0
1
Unem
ploy
men
t Rat
e
7.5%
5.5%
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 April 2012.
Montana
Cascade
U.S.• Montana has the 12th lowest
unemployment rate in the U.S.
Regional and Reservation Unemployment 2012
Source: Montana Dept. of Labor and Industry Reservation Unemployment Rates, 2012, and Local Area Unemployment Statistics, BLS and MTDLI.
2006 2007 2008 2009 2010 2011 2012 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Montana Average Annual Wages
Source: Quarterly Census of Employment and Wages, BLS, and MT DLI
Montana 2012: $37,100Cascade 2012: $35,400
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 Gr
owth
and
Infla
tion
Montana Average Annual Wages
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 Gr
owth
and
Infla
tion
Montana Average Annual Wages
Source: Quarterly Census of Employment and Wages, BLS, and MT DLI. 48 th determined by 2011 ranking.
WAGE GROWTH
2nd
Fastest Wage
Growth Last Year
Yet, 44th 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 GovernmentLeisure Activities
Leisure ActivitiesAll OtherAll Other
Health Care and Ed-ucation
Health Care and Ed-ucation
Business Services Business Services
Financial Services Financial Services
Retail and Wholesale Trade
Retail and Wholesale Trade
ManufacturingManufacturing
Construction
Construction
MiningMining
Agriculture Agriculture
Transportation and Util-ities
Transportation and Utilities
Source: Bureau of Economic Analysis, Gross Domestic Product 2011.
Utilities
Agriculture
Mining
Transportation
Manufacturing
Admin and Waste Services
Professional Services
Finance and Real Estate
Construction
Other
Public Affairs
Education
Leisure Activities
Health Care
Trade
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
Comparative Industry Employment
Source: Quarterly Census of Employment and Wages, 2012.
Federal – 3%State – 5%
Local – 11%Private – 81%
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%
Comparative Industry Private Employment: US, MT, and South Central MT
Source: Quarterly Census of Employment and Wages, 2011 Private Employers only.
MTUS
North Central
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%
Comparative Industry Private Employment: US, MT, and South Central MT
Source: Quarterly Census of Employment and Wages, 2011 Private Employers only.
MTUS
North Central
iClicker Question
What industry do you represent?
A. Wholesale or retail trade
B. Leisure Activities (hotel, food, entertainment)
C. Healthcare
D. Education
E. Other
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
ManufacturingConstruction
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
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
10
20
30
40
50
60
70
New
Yor
kCo
nnec
ticut
Mas
sach
usett
sN
ew Je
rsey
Calif
orni
aIll
inoi
sM
aryl
and
Dela
war
eVi
rgin
iaW
ashi
ngto
nTe
xas
Colo
rado
Alas
kaM
inne
sota
New
Ham
pshi
rePe
nnsy
lvan
iaGe
orgi
aM
ichi
gan
Arizo
naRh
ode
Islan
dW
yom
ing
Tenn
esse
eLo
uisia
naO
rego
nO
hio
Nor
th D
akot
aN
orth
Car
olin
aM
issou
riN
evad
aFl
orid
aW
iscon
sinKa
nsas
Indi
ana
Okl
ahom
aAl
abam
aUt
ahHa
wai
iVe
rmon
tKe
ntuc
kyN
ew M
exic
oW
est V
irgin
iaIo
wa
Sout
h Ca
rolin
aN
ebra
ska
Mai
neAr
kans
asId
aho
Sout
h Da
kota
Mon
tana
Miss
issip
pi
Aver
age
Wag
e
Labo
r Pro
ducti
vity
(GSP
per
wor
ker h
our)
Source: Wages from Quarterly Census of Employment and Wages, 2011 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
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
Islan
dCa
lifor
nia
Kans
asUt
ahHa
wai
iO
rego
nDe
law
are
Mon
tana
Neb
rask
aM
aine
Geor
gia
Alas
kaPe
nnsy
lvan
iaN
orth
Dak
ota
Nor
th C
arol
ina
Arizo
naW
iscon
sinTe
xas
Sout
h Da
kota
Flor
ida
Miss
ouri
New
Mex
ico
Iow
aO
hio
Idah
oW
yom
ing
Sout
h Ca
rolin
aTe
nnes
see
Okl
ahom
aIn
dian
aN
evad
aAl
abam
aLo
uisia
naKe
ntuc
kyM
ississ
ippi
Arka
nsas
Mic
higa
nW
est V
irgin
iaPopu
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.
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
Islan
dCa
lifor
nia
Kans
asUt
ahHa
wai
iO
rego
nDe
law
are
Mon
tana
Neb
rask
aM
aine
Geor
gia
Alas
kaPe
nnsy
lvan
iaN
orth
Dak
ota
Nor
th C
arol
ina
Arizo
naW
iscon
sinTe
xas
Sout
h Da
kota
Flor
ida
Miss
ouri
New
Mex
ico
Iow
aO
hio
Idah
oW
yom
ing
Sout
h Ca
rolin
aTe
nnes
see
Okl
ahom
aIn
dian
aN
evad
aAl
abam
aLo
uisia
naKe
ntuc
kyM
ississ
ippi
Arka
nsas
Mic
higa
nW
est V
irgin
iaPopu
latio
n 25
and
Old
er w
ith B
ache
lor'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
• Use of technology
• Spread of best practices and innovative methods
• Business Size
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
Dela
war
eN
ew Je
rsey
Calif
orni
aM
inne
sota
New
Ham
pshi
reCo
nnec
ticut
Arizo
naM
issou
riUt
ahGe
orgi
aTe
xas
Rhod
e Isl
and
Nor
th C
arol
ina
Neb
rask
aN
ew Y
ork
Ore
gon
Illin
ois
Ohi
oM
ichi
gan
Penn
sylv
ania
Verm
ont
Wisc
onsin
Kans
asFl
orid
aAl
abam
aIo
wa
Idah
oN
ew M
exic
oN
orth
Dak
ota
Indi
ana
Sout
h Ca
rolin
aTe
nnes
see
Alas
kaAr
kans
asKe
ntuc
kyM
aine
Okl
ahom
aHa
wai
iM
onta
naSo
uth
Dako
taW
est V
irgin
iaN
evad
aLo
uisia
naW
yom
ing
Miss
issip
pi
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
• Use of technology
• Spread of best practices and innovative methods
• 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
Business Startups by County 2007-2010(as percent of existing establishments)
Source: Research and Analysis Bureau, MT Dept of Labor and Industry
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%
Aver
age
Wag
e
Perc
ent o
f Firm
s Offe
ring
Insu
ranc
e
Average WageProviding Insurance
Factors Influencing Productivity
• Education
• Experience in job
• Job Matching
• Industry Mix
• Urban concentration
• Use of technology
• Spread of best practices and innovative methods
• Business Size
Economic Development Concept Map
Full Report Available atwww.lmi.mt.gov
Barbara Wagner,Chief Economist
Montana Department of Labor and Industry406-444-5474
