Weekly Economic Report: Employee Compensation by County and Industry

by Wyoming Liberty Group Staff

Wyoming has the nation's highest Government Employment Ratio and the third-highest Government Compensation Ratio. Our state also lacks in industrial diversity.

Main finding: Counties where government earnings are a significant share of employee compensation are more industrially diverse than counties with a relatively smaller dependency on government.

The private sector plays a very different role depending on county. Using 2017 raw data from the Bureau of Economic Analysis, Table 1 reports the share of total employee compensation that came from the private sector:

There is one unique feature of the BEA raw data from which Table 1 is calculated. Unlike the Bureau of Labor Statistics data where Niobrara is always reported as "insufficient data", the BEA provides numbers on employee compensation that gives us a picture of why the BLS has difficulties with this county. Farm work is responsible for more than five percent of total payroll, a comparatively large number. Since farm payroll is difficult to measure, the lack of data in BLS statistics now has its explanation.

Below follows a county-by-county summary of what industries dominate where.

Albany: The largest private industry is "professional, scientific and technical services", which accounts for a total of 5.9 percent of all employee compensation. This is also the one county where state and local government is responsible for more than half of all employee compensation, 51.3 percent to be exact.

Big Horn: Minerals dominate at 13.8 percent of total employee compensation. State and local government still comes in as the largest industry, but at 34.9 percent it is a far cry from its share in Albany county.

Campbell: The minerals industry provides 33.3 percent of employee compensation. State and local government is small at 18.8 percent. Notably, almost all of this government compensation is local.

Carbon: Manufacturing of non-durable goods provides 26 percent of all employee compensation, ahead of state and local government at 24.4 percent.

Converse: With minerals at 26.5 percent, the largest private industry is a hair behind state and local government (27.1 percent). Almost nine out of ten dollars earned in non-federal government is earned in local government.

Crook: While minerals is largest at 12.8 percent, manufacturing comes in a relatively close second at ten percent. State and local government accounts for 26.8 percent of all employee compensation.

Fremont: Two industries are essentially equal: retail trade (7.06 percent) and minerals (7.01 percent). However, state and local government dominates both at 35.7 percent.

Goshen: Ambulatory health care provides 7.6 percent of all employee compensation. Manufacturing (5.7) and retail trade (5.3) are the other two in the private sector that exceed five percent. State and local government pay out 35.3 percent of all employee compensation.

Hot Springs: Health care and social assistance leads among private industries at 11.5 percent of employee compensation. Minerals is a close second at 9.7 percent. State and local government leads at 32.9 percent.

Johnson: Minerals dominate the private sector at 11.1 percent. No other private industry comes close. State and local government are three times bigger at 33.4 percent.

Laramie: A comparatively diversified economy, with infrastructure – transportation and warehousing – in the lead with 7.6 percent of employee compensation. Retail trade (6.0) and construction (5.9) are close behind. State and local government is responsible for only 27.4 percent of all employee compensation in this the state's capitol county.

Lincoln: Two industries dominate the private sector, namely minerals at 19.6 percent and construction at eleven percent. At 28.9 percent the state-and-local government share is almost the same as in Laramie county.

Natrona: Health care and social assistance leads at 15.6 percent, with mninerals a relatively distant second (11.0). A relatively diversified private sector keeps state and local government small by comparison (14.9).

Niobrara: The second county where the industry of state and local government is responsible for more than half of all employee compensation (54.7 percent). Infrastructure leads the private sector at only seven percent of total employee compensation. Farm jobs account for more than eight percent of total payroll, a very unusually large share.

Park: As in Natrona, this county's largest private industry is health care and social assistance (11.2 percent). There is also a relatively high rate of industrial diversity, with retail trade and "tourism", i.e., accommodation and food services, at 7.7 percent. Construction is close behind at 6.9 percent, while state and local government is relatively moderate (24.7).

Platte: Construction leads at 9.9 percent with infrastructure close behind at 8.9 percent. State and local government is relatively small at 19.5 percent.

Sheridan: The earnings profile is notably diverse, with health care and social assistance at 8.3 percent, and construction and retail trade both at 7.9 percent. State and local government provide 26.4 percent of all employee compensation.

Sublette: Minerals dominate clearly at 39.6 percent of total employee compensation. Here, non-federal government is a distant second at 20.8 percent.

Sweetwater: A profile similar to Sublette, with minerals responsible for 32.4 percent of total employee compensation. State and local government account for 17.1 percent and manufacturing for 10.4 percent.

Teton: Accommodation and food services pay out 23.5 percent of all employee compensation, with construction a distant second at 11.6 percent and professional services at 8.4. State and local government is small at 14.1 percent.

Uinta: Construction leads at 11.5 percent, with health care and social assistance in second place at 10.7 percent. State and local government is responsible for 26.6 percent of all employee compensation in the county.

Washakie: Manufacturing dominates at 15.2 percent, handily outpaced by state and local government (22.4).

Weston: With manufacturing at 13.6 percent and state and local government at 35.5, there is little to no room for other industries. Infrastructure is responsible for 8.5 percent and minerals for 7.1 percent.

These proportions have shifted over time, in good part due to the long-term shift in the relationship between government and private employee compensation. Government has slowly become larger relative the private sector, including employee compensation. Only three counties – Carbon, Sublette and Crook – have seen the private share increase over the time for which BEA has published data (2001-2017). In every other county the share has fallen.

This is particularly problematic in Niobrara county, where the private sector's share of employee compensation stood at 53 percent in 2001 and 51.1 percent in 2002. In 2015 it fell below 40 percent and reached its lowest share to date in 2017 at 37.9 percent.

Implications of the findings

Industrial diversification is good for an economy, but the need for it varies greatly across the counties in Wyoming. For this reason, it is recommendable that our state's legislators actively work to decentralize authority over some economic-policy instruments, specifically those that can help businesses grow and thrive locally. This means regulatory reform and reform to spending habits by, primarily but not solely, school districts. A more prudent approach to school funding would open up economic resources available for growth-oriented reform at the local level.