Confidence in Wyoming economy lacking

Wyoming is outperforming the national economy in job growth and lower
unemployment, but whether that boom turns to bust remains to be seen, according to a state economist.

Associated Press Billings Gazette

Wyoming nonagricultural jobs grew by 2.1 percent between February 2001 and February 2002, while the
seasonally adjusted unemployment rate in February 2002 was 3.6 percent compared to the national rate of 5.5
percent, according to the April issue of Labor Force Trends from the state’s Department of Employment.
Yet there is concern whether the good times will last, said Buck McVeigh, administrator of the Division of
Economic Analysis of the Department of Administration and Information.
"Historically, the Wyoming economy is countercyclical because we’re a commodity-exporting economy," he
said.

Wyoming has done well when the national economy hurts because the state becomes that much more a
key source for commodities such as coal, McVeigh said.
But when commodities become more plentiful elsewhere and cheaper, the rest of the nation does not
need to rely on Wyoming as much for commodities, he said.
"We’re starting to see a turnaround in the national economy," McVeigh said.
The prospect of a national upturn could pressure a downturn in Wyoming’s economy, he said.
But that may not occur, because of increasing economic diversification, he said.
A recent U.S. Bureau of Economic Analysis report showed preliminary figures that per capita income in
Wyoming in 2001 was $28,807, compared to $28,499 average for the other states in the Rocky Mountain
Region, McVeigh said.
"This is the first time in a long time" that Wyoming has led the region in per capita income, McVeigh said.
"We are for real in the labor market."
The energy boom is driving the state’s economy and providing the highest paying jobs, McVeigh said.
But the service and trade sectors show the most growth in terms of numbers of jobs, too, he said.
While most of the service and trade sector jobs pay lower-than-average wages, "services" includes high
paying professions such as medicine and law, McVeigh said.
Wyoming’s aging population fuels the growth in health care, he said.
Anecdotally, McVeigh is seeing more retired people moving to Cheyenne and building large homes, he
said.
But the state’s tax structure is "income inelastic," in that their spending and construction does not lead to
higher tax revenues, McVeigh said.
Even economic diversification, he said, does not necessarily improve the tax base because Wyoming
depends so much on mineral industry revenues and not on income taxes. Wyoming does not have an income
tax.
In fact, more people may cause a drag on local governments, law enforcement, schools and other
services, McVeigh said.
"More people could further impact public service demand."
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