Wyoming Liberty Group
Wyoming Falling Behind National Economic Recovery
Recent employment numbers from the Bureau of Labor Statistics show that Wyoming is not out of the recession yet – far from it. Total non-farm employment is going nowhere:
· In the fourth quarter of 2011 a total of 289,600 Wyomingites had a job in either the private sector or with government;
· In the fourth quarter of 2012 that number was 289,500;
· In the first quarter of 2013 it climbed marginally to 290,000.
For comparison, there are still fewer people working in Wyoming today than in 2007. But what is more troubling is that there has been no upward movement in employment since mid-2011: the third and fourth quarters of that year averaged 289,300 jobs.
In other words, we are well into a second year with zero job growth – after the U.S. economy hit the bottom of the recession.
It is true that the national recovery is slow, and a major reason for this is irresponsible fiscal policy by Congress and the President’s stalwart commitment to the mega-tax, mega-regulation package known as the “Affordable Care Act.” But at the same time, the Bureau of Economic Analysis reports that the U.S. economy grew by an inflation-adjusted 2.5 percent in the first quarter of 2013.
The Bureau of Labor Statistics reports that there are 2.5 million more people with jobs across America today than in 2011, a tepid increase of 1.9 percent – but still an increase.
Should not Wyoming, a low-tax state with a supposedly business-friendly climate, be pulling ahead of the national trend? Of course we should. But instead of being ahead of the curve we are falling behind.
Why is that? Part of the explanation is in the three dark clouds on the Wyoming horizon that I warned of in February: the federal government’s anti-coal energy policy, our state’s dependency on federal funds and our very poor GDP numbers.
The energy policy threat is still credible. The Obama administration appears to still believe in global warming despite strong evidence to the contrary. At the same time, global demand for coal will probably keep Wyoming in the business, as there are between 1,000 and 1,200 new coal plants planned or under construction around the world. Reasonably, we can expect coal exports to continue but should not bank on the coal mines to pull our state economy forward.
As for the federal funds problem, our dependency ties our state and local governments to spending more money, funded by local taxes, than would be the case if we were fiscally independent of Uncle Sam. This includes the problem with the state and, even more so, local governments absorbing more workers on artificially inflated salaries and benefits. (Because of its taxation power, government competes unfairly with the private sector for skilled workers.) A direct consequence is that it becomes more difficult for private employees to find talented workers in many rural areas of our state.
The third dark cloud, our stalled state GDP, is really a sum-total of all our problems. Growth and prosperity are generated by the private sector; when businesses stop hiring people it is a clear sign that something is very wrong in our economy. What with these numbers:
· Nationally the private sector has close to four million more employees today than in mid-2011 (up 3.4 percent);
· The private sector in Wyoming has almost to the decimal the same number of employees now as it had in mid-2011.
There is a conventional wisdom in Wyoming that all we need to do is rely on the natural resources industry to fix all our economic ailments. That notion rests on the premise that demand for natural resources rises early on in an economic recovery. That has not happened this time around, for reasons that I don’t have room to elaborate on here. But the fact that we are falling behind the national economic trend is reason enough for our elected officials to rethink their conventional wisdom.
We are now deep into 2013 and the final stretch of Governor Mead’s first term. While he has taken good action on limiting state spending, he has thus far failed to recognize – at least in action – the broader problems our state economy is facing. Together with our lawmakers, Governor Mead needs to step up to the plate and take our economic stagnation seriously.
To get the wheels going, the governor – and our lawmakers – could begin by focusing on how to promote more economic freedom in Wyoming.