Thursday, April 27, 2017

Census Bureau Tool Provides Labor-Force Insight for Utah

By Mark Knold and Lecia Langston

Across the United States, jobs are quantified through each state’s unemployment insurance program. Those programs provide the potential for laid-off workers to receive unemployment benefits — the goal being to bridge the gap between workers’ lost jobs and their next jobs. An eligible recipient’s weekly benefit amount is based upon their earnings from recent work. This begs the question, how does Utah’s unemployment insurance program know how much an individual recently earned while working?

That answer is supplied by all businesses that hire workers, as they must report their employees and pay as mandated by the unemployment insurance laws. Companies identify their individual workers and those workers’ monetary earnings for a calendar quarter. As businesses are identified by their industrial activity and geographic location, it is through the unemployment insurance program that aggregate employment counts by industry and location are calculated.

Yet each state’s profiling of individuals is quite minimal in the unemployment insurance program. The U.S. Census Bureau can bring more light to the overall labor force by supplementing said information with gender, age, race/ethnicity and educational attainment (imputed from American Community Survey responses) for Utah’s labor force.

The Census Bureau packages this information through their Local Employment Dynamics program and makes available said data on its website. Here at the Department of Workforce Services, we recently downloaded and packaged Utah-specific data from said website and summarized it in the attached visualization.

Various data “tabs” are available, presenting Utah’s economy from different angles, ranging from industry shares within the economy to the age-group distributions of the labor force, to gender and race distributions. These labor variables can be viewed for the state as a whole, or by each individual county.

Some statewide highlights:

Industry — industrial distribution is quite diverse, which provides strength within the economy. Distributions do fluctuate with time, with manufacturing seeing its share lessen while health care and professional and business services shares have increased.

Age — the bulk of Utah’s labor force is composed of 25- to 44-year-olds. Older worker shares have increased over the past 15 years, yet still remain a non-dominant portion of Utah’s labor force. The youngest segments of the labor force declined noticeably during the Great Recession due to less participation, and that trend remains.

Educational Attainment — turnover rates are understandably highest with workers under the age of 25 as they strive to build their educational foundation and also find their niche in the labor market. A trend does stand out where the more education that a worker attains, the lower the turnover rate businesses experience from said educational classes.

Race/Ethnicity —Whites account for around 80 percent of Utah’s labor force. The Asian community is small but slowly increasing in share, and is also characterized with the lowest turnover rate and the highest new-hire wages.

Gender — males comprise about 55 percent of Utah’s labor force. The female share of 45 percent is higher than the national average. Roughly 35 percent of working females work part-time compared to 15 percent for males. Therefore, female new-hire wages are considerably lower than male new-hire wages. (Note: employer reporting into the unemployment insurance system is not hourly wage rate reporting but instead total calendar quarter wages paid. Therefore, calculations can only be made upon total quarterly wages, and part-time employment weakens this measure).

Here are some labor highlights for the Southwest Utah Region:

The Southwest Utah economy is dominated by metropolitan Washington County. Not surprisingly, compared to the broader regional context, individual counties may have experienced notably different labor market trends that are certainly worth exploring. For this post, the Southwest Utah region includes Beaver, Garfield, Iron, Kane and Washington counties.

The effect of the pre-recession, homebuilding bubble on industrial employment trends is evident. Southwest Utah’s construction employment share ballooned from about 11 percent in 2000 to more than 15 percent in 2006. Then, construction lost considerable ground as the economy collapsed and recession ensued. Its employment percentage dwindled to only 7 percent in 2012. While the industry has regained some ground during the expansion, in 2015 its share of employment still measured less than 9 percent.

Health care and social services have made the strongest segment gains in the 15-year period. In 2000, this sector accounted for roughly 8 percent of total employment in Southwest Utah. By 2015, its job share had increased to nearly 14 percent.

Construction wasn’t the only industry to lose employment standing in Southwest Utah. Between 2000 and 2015, manufacturing’s portion of employment dropped from 8 percent to about 5.5 percent.

Like most other regions across Utah, younger workers have made up a smaller and smaller share of total Southwest Utah employment over time. In contrast, older workers have increased their share. Part of this change reflects demographic changes. Yes, baby boomers, it really is all about us (even though millennials might think it’s all about them). As baby boomers have aged toward retirement, old workers’ portion of the employment pie has swelled. However, younger people are also not participating in the labor force at the rates they did even just 15 years ago.

In 2000, workers under age 18 made up 11 percent of Southwest Region workers, today they account for a mere 6 percent. On the other hand, workers 55 and older also comprised about 10 percent of workers in 2000, but increased their share to nearly 19 percent in 2015. Moreover, the less-populated counties of the Southwest Region are older than their metropolitan cousins in general. Statewide, only 17 percent of workers are 55 years and older.

Among the general population, educational attainment has steadily increased in Utah. In contrast, LED labor market trends show a somewhat different pattern. Traditionally, educational attainment categorization is applied only to those over 25 years who are more likely to have completed (or mostly completed) their schooling. The shrinking share of young people in the labor market is readily apparent in the educational attainment charts. Statewide workers under 25 years comprised almost one-third of the employed in 2000 compared to only 21 percent in 2015. The Central Utah and Southwest Utah Regions showed the same pattern.

Excluding workers under 25 years from the statewide educational attainment figures reveals there was actually a slight increase in the portion of the work force with less than a high school education between 2000 and 2015 (from 11 to 13 percent). Southwest Utah showed a similar trend with a slightly higher share of workers with less than a high school education in 2015 (15 percent). On the other end of the spectrum, the proportion of employees with a bachelor’s degree or higher also increased, but just slightly.

Why the divergence in educational trends in the population and employment? Demographics may be at work. Older generations generally have less educational attainment than younger generations. As the older-worker share of the employment base increases, so does their influence on educational attainment. In addition, the influx of less-educated in-migrants into the workforce during the time frame may have also contributed to the slight rise in the share of workers with less than a high school education.

Southwest Utah’s employment base is slightly less racially and ethnically diverse than not-particularly-diverse Utah. For example, 82 percent of Southwest Utah employment is white, not Hispanic, while Utah displays less than 81 percent in that category. However, the same trends in diversity are occurring. Both the Utah and Southwest Utah workforces are becoming more ethnically and racially varied. In particular, Hispanics/Latinos have shown the largest share gains.

Beaver County

In Beaver County, the standout industry is “covered” agriculture. The administrative laws that allow us to collect employment data cover only a segment of agricultural employment. In the region overall, these covered agricultural jobs measured only 1 percent of the total. In Beaver County, covered agriculture has made up a relatively steady 21 percent of total employment.

Wind farm construction is part of the county’s 2000 to 2015 story as the share of construction employment expanded and contracted several times. The other trend of note is the declining share of leisure/hospitality sector employment. In 2000, these tourism-dependent jobs contributed almost 22 percent of Beaver County employment. By 2015, that share had dropped to 15 percent.

In many ways, Beaver County’s labor force age distribution mirrors the region as a whole. Younger workers’ share of employment is declining while older workers’ share is increasing. Workers under the age of 19 do make up a slightly larger share of Beaver County’s employment base than the regional average.

As is the case in many nonurban counties, Beaver County’s labor force tends to be less educated than the labor force of the state or the region. In Utah, 26 percent of workers had at least a bachelor’s degree; in Beaver County the share was 10 percentage points lower. In addition, a higher percentage of Beaver County workers (almost 18 percent) did not have a high school education. Perhaps the dependence of Beaver County’s agribusinesses on low-skilled labor contributed to this result.

For a rural county, Beaver County shows unusual racial and ethnic variety. Its minority shares closely reflect those of the region. Roughly 12 percent of Beaver County workers were Hispanic or Latino in 2015, up from 8 percent in 2000.

Garfield County

In Garfield County, leisure/hospitality services employment is king. This industry produced between 50 and 52 percent of the county’s employment during the 2000 to 2015 time period. In the entire region, leisure/hospitality services make up only about 19 percent of employment. Statewide, the share measures only 11 percent.

Over the time frame in question, manufacturing has made up a smaller and smaller share of employment while health care/social services’ portion has increased.

Between 2000 and 2015, Garfield County has experienced a strong increase in the share of its workers with a bachelor’s degree or higher. Roughly 15 percent of workers held a college degree in 2000 compared to 18 percent in 2015. In addition, while relatively high (about 15 percent), the segment of workers with less than a high school education has changed little over the last 15 years.

Garfield County’s Hispanic/Latino workforce share increased only slightly over the last 15 years and remains low (even for Utah) at 7 percent. Garfield County does show a larger-than-average Native American labor force portion (almost 3 percent, compared to about 1.5 percent regionally).

Iron County

Iron County joined in the pre-recession building boom of its neighbor to the south. Construction employment surged to 12 percent in 2006 from 7 percent in 2000. After collapsing to only 4 percent of employment during the downturn, the industry had regained little ground by 2015.

Manufacturing, which plays a stronger role in Iron County than in many nonurban areas, has also lost employment-share ground over the past 15 years. In contrast, education (which includes public education and Southern Utah University), leisure/hospitality services and health care/social services all increased their piece of the Iron County employment pie over time.

Iron County’s labor force age distribution and trends are very similar to those of the region. No doubt Southern Utah University’s presence results in Iron County’s higher-than-average portion of workers aged 19 to 24 years.

Iron County also experienced an increase in the share of workers with less than a high school education between 2000 and 2015. Interestingly, the share of workers with a bachelor’s degree or higher has remained very steady.

As with most areas in Utah, the main racial/ethnic story of the Iron County workforce is the increasing portion of Hispanic/Latino workers. Between 2000 and 2015, Hispanics and Latinos increased their labor market share almost 3 percentage points to more than 9 percent in 2015.

Kane County

As in Garfield County, tourism is important to the Kane County economy. Leisure/hospitality services currently comprise almost 40 percent of the area’s employment, up from 34 percent in 2000. Other services’ expanding (and relatively large) share of employment reflects the importance of the Best Friends Animal Sanctuary to the county.

When employment share goes up for several industries, it goes down for others. In Kane County, both manufacturing and construction made up a much smaller portion of total employment in 2015 than they did in 2000.

In Kane County, the shift from younger workers to older workers appears even more pronounced than the regional trend. The percentage of employment held by workers under 19 dropped from over 14 percent in 2000 to less than 7 percent in 2015. Moreover, workers 55 years and older accounted for a higher-than-average portion of employment — almost 23 percent in 2015.

Kane County experienced little change in the share of jobs held by workers with less than a high school education. However, the percentage of workers with at least a bachelor’s degree expanded and in 2015 measured almost 21 percent — slightly higher than the region average.

Kane County displays a larger-than-average portion of Native American workers (roughly 4 percent) than does Utah (less than 1 percent) or the Southwest Utah region (1.4 percent). Although the percentage of Hispanic/Latino workers has increased between 2000 and 2015, the change appears smaller than in most areas.

Washington County

With its strong population growth, Washington County’s construction industry has played a more important role in providing employment than in the rest of the region or in Utah. However, mid-decade irrational exuberance in home-building created a construction employment bubble as well. At the peak of the boom, construction accounted for 17 percent of Washington County employment. By 2015, that share had shrunk to 10 percent, still below the 13 percentage share of 2000.

Health care/social services produced the other noticeable employment trend between 2000 and 2015. This industry has grown from about 9 percent of Washington County employment to almost 16 percent in 2015.

While leisure/hospitality services are important to this county with its many attractions for tourists, its share of employment has remained quite stable ranging between 16 and 18 percent.

Not surprisingly given its size, Washington County’s labor market age trends follow the regional pattern. Workers under 21 have lost ground, while workers over 55 have gained ground. Despite its reputation as a senior mecca, the area’s 55-and-older workers comprised only a slightly higher proportion than in Utah. Of course, most move-in seniors have retired and left the labor market.

The percentage of workers over 25 in each educational-attainment category held relatively steady between 2000 and 2015. The only change of note occurred for workers with less than a high school education. This group’s share of the employment pie increased from less than 14 percent to 15 percent in 2015.

Like elsewhere, Hispanic/Latino workers have increased their share of the Washington County workforce over time. In 2015, their portion stood at 11 percent, just slightly lower than the Utah figure. The Hispanic/Latino share bulged in the big boom construction years when demand for workers attracted individuals from other regions.