So despite the continued need to focus on wages I branched out a bit this week. Wage level growth, or the lack of it, can explain a significant amount of the problems for Grand Forks in terms of labor market dynamics as well as a general radio caller sense that things are not moving in the right direction. It seems to me that we should also look at a broader picture at the same time and bring in more labor market variables and some variables completely outside the labor market. In this post I decided to look at employment in five different counties.
This is total employees in private sector firms of all sizes. A few things jump out right at the start. There is remarkable stability in trajectory and rank order prior to 2010. There seems to be minimal deviation from long run trend, if any. Now I do not like this graph much at all. The inclusion of Cass county, home to Fargo, compresses the scale of the graph somewhat. The other issue is more subtle. The persistent bumps in the graphs lead me to believe we have seasonality in the data, and why not? Employment data, especially monthly frequency is often known to exhibit a seasonal pattern. What I think would help draw a better picture of the growth situation in these communities is to look at some percentage change data.
Te percentage change data also suffer from a horrible compression. This is not to a shock given what was happening in the Bakken region over the last thirteen or so years. The enormous percentage change in Williston employment compresses all other series down to a nonsensical mash up. It is pretty if you wanted to make a rainbow but it is pretty lousy at showing anything about the changes over time. That said, we should stop a moment to appreciate the amazing growth that occurred in the Bakken region over this time.
The solution to the compression problem is to drop the Williams county series. I am not worried about excluding data here because we already looked at the data including Williams county and recognize its importance, but also the way it impedes analysis too. This next picture is good, but the situation in Ward county, home to Minot, creates a less severe, but still annoying compression problem.
The unfortunate truth is that the Bakken counties and those nearby were so drastically altered and impacted by the oil boom that inclusion with the other areas at times makes for incomprehensible comparisons. As a result I will drop Ward county as well to see what we can understand about Grand Forks percentage change in employment from a comparison with Cass and Burleigh counties.
The picture for Grand Forks is a bit clearer now that Bakken region, both the primary and secondary areas, are excluded. The up and down aspect to the data is very reminiscent of a macro-type cycle. The fact that it influences all three series is exciting since it means all three could be influenced by the same factor and there is some level of integration between the labor markets.
Getting to the picture for Grand Forks: it does not look great. In terms of the percentage change you see that over much of this time Grand Forks grows slower than the other two counties. This would be some further confirmation of some of the radio caller discussions over the last few weeks: Grand Forks is not experiencing the influx of workers like Fargo of Bismarck.
It is premature to view this as a cause or consequence of generic economic concerns in Grand Forks. There are too many items still to address for that level of certainty. What seems sure is that along with some wage issues brought out in earlier posts (see here and here for example) the overall employment picture, from the perspective of people employed does not really paint a rosy picture for Grand Forks. While this matches well with the anecdotal evidence from radio callers and employers public announcements, it still does not really explain why things are moving in this direction for Grand Forks. The uncertainty may actually be the worst part of this outcome. More to come.