Montana’s economy has bright spots

SUMMARY: Fixating on traditional resource industries paints a skewed picture of Montana’s changing economy.

Missoulian Opinion

We spend so much time in this state talking – and arguing – about the need to improve the economy that it’s easy to overlook the progress we’ve made doing just that.

Montana’s economy is growing. Gross state product in 2000 (the most recent published data) was nearly $21.8 billion. That’s up from $13.4 billion in 1990, using in inflation-adjusted figures from the U.S. Bureau of Economic Analysis.

The number of employers grew statewide by 42 percent (to 40,477) from 1991 to 2001, according to figures from the state Department of Labor and Industry’s Research and Analysis Bureau. The total number of employees grew 31 percent in that period, and total wages paid grew 77 percent. The state’s population grew roughly 13 percent during the decade of the 1990s; jobs are growing faster than the population.

So, why are we Montanans so certain our economy is going down the drain? Part of it may be because, despite the growth, Montana’s economy is small to begin with and less prosperous than a lot of other states. But part of the perception may also be rooted in the nature of Montana’s economic growth. The growth hasn’t been across-the-board. Traditional natural-resource industries – mining, lumber, petroleum – haven’t done as well as other industries.

Take a closer look at the Research and Analysis Bureau’s figures for 1991 and 2001. Mining employment declined 6 percent in that period and wages grew at less than half the rate that overall wages grew. Lumber-mill employment fell 12 percent, while wages for that sector increased 21 percent (compared to the average 77 percent for all jobs).

By contrast, health services employment grew 34 percent in the same period, with total wages paid up 99 percent. Business services employment grew 148 percent, with total wages up 309 percent. Retail trade employment grew 29 percent and wages paid rose 72 percent.

Natural resource jobs pay relatively high wages, but so do engineering, financial services, legal services, health services, wholesale trade, utilities and construction. When you multiply the number of jobs by the wages paid, you find a whole host of industries have as much impact on Montana’s economy as our traditional resource industries – and some have a good deal more. This doesn’t diminish the importance of those traditional industries and the jobs they provide. Indeed, every job counts.

But it’s important to recognize that the economy is more diverse than is sometimes portrayed in our public debates. There may, indeed, be opportunities to expand our traditional economic base, say, through more logging and mining. Efforts to do so over the past couple of decades, however, have been mixed at best. We’ve actually had far more success growing other portions of the economy. If the economy isn’t growing as fast as we’d like, perhaps it’s because we pay disproportionate attention to the sectors that have proved the most difficult to grow.

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