2017 ECONOMIC AND WORKFORCE PROFILE Douglas County

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1 2017 ECONOMIC AND WORKFORCE PROFILE Douglas County STATE OF WISCONSIN DETI DOU-P (R. 3/2018)

2 Percentage of Total Popula on, Ages 65 and Older

3 Wisconsin now has more people employed and more private sector jobs than at any me in its history. As of this wri ng, the state added 56,100 jobs during 2016 and Employment increased in almost all industry sectors, with prominent gains in construc on, manufacturing, and healthcare. Wisconsin s unemployment rate is near lows not seen in a genera on, decreasing from 4.3 percent in January 2016 to 3.2 percent in December 2017, on a seasonally adjusted basis. Wisconsin faces a worker quan ty challenge. The number of re ring Baby Boomers nearly match the influx of new workers, resul ng in a slow growing workforce and placing constraints on the ability by employers across all industries to hire talent. Many businesses report that the lack of available workers has hindered expansion and, in some cases, even curtailed their ability to meet current product orders. The blue line, orange line graph to the right illustrates the situa on in Wisconsin and other upper Midwest states. While Wisconsin's popula on will con nue to grow over the next twenty years, the workforce faces serious constraints. The labor force par cipa on rate (LFPR), defined as the labor force (sum of employed and unemployed) divided by the total popula on ages 16 and older, measures the popula on's engagement in the workforce and serves as an indicator in determining how Wisconsin's workforce will be constrained. The overall LFPR peaked in the late 1990s and has been trending lower ever since. The LFPR of peaks across Source: Local Area Unemployment Sta s cs, Bureau of Labor Sta s cs the age cohort at over ninety percent and decreases rapidly into the single digits by age seventy. Baby Boomers have and con nue to exit with respect to their LFPR. The mass of Baby Boomers has moved into the work lifecycle stage of declining LFPRs, with the tail end of the cohort turning 55 in Source: Bureau of Labor Sta s cs A recent development is the change in the labor force par cipa on rate trend. The LFPR of older workers (those aged 55 years and older) has turned upwards, resul ng in fla ening of the overall LFPR. More boomers are staying in the workforce longer, which may portend higher workforce growth over the coming years. Due to the size of the Baby Boomer cohort and the sensi vity of the LFPR to workforce growth rates, a rela vely small change in the LFPR of older workers would significantly boost the number in the workforce. 1

4 Popula on and Demographics Source: Demographic Services Center, Wisconsin Department of Administra on Between the years 2010 and 2016 Douglas County s popula on increased by 256, or 0.6%. Douglas County s popula on growth rate ranks 40 out of 72 Wisconsin Coun es. This increase con nues a trend of increasing popula on which started in the 1990s. At its highest, Douglas County s popula on was 49,771 in During the same me frame, , the United States and the State of Wisconsin saw popula on growth rates of 4.8% and 1.5%, respec vely. From 2010 to 2016, Douglas County had a yearly average growth rate of 0.10%. During the period, Douglas County s yearly average popula on growth was 0.20%. According to the recent es mates found above, Douglas County s popula on change is star ng to slow down. Douglas County s net popula on increase was based on natural increase within the county and migra on into the county. The graph to the right shows its net migra on was 0.2% which means that a greater number of people moved into the county than out of the county. The natural increase was 0.4% which means that the county recorded more births than deaths over the six year period. Components of Popula on Change According to data gathered from Wisconsin s Department of Health Services, Douglas County s birth rate (births per 1,000 women aged 15 44) in 2015 was 50.3 which rated 67th highest out of Wisconsin s 72 coun es. The birth rate for the state of Wisconsin in 2015 was Douglas s rate in 2010 was 58.2, while Wisconsin s rate was Source: Demographic Services Center, Wisconsin Department of Administra on 2

5 Labor Force Dynamics The above graph Source: Local Area Unemployment Sta s cs, Bureau of Labor Sta s cs outlines Douglas County s monthly unemployment rate over the past 25 years comparing it to the state of Wisconsin and the United States. There was a great deal of variance in Douglas County from when compared to Wisconsin and the United States. Its rates started to match Wisconsin s closely from and then started to differ greatly again from 2016 to the present. The labor force is made up of the employed and unemployed. To be classified as employed, you must be 16 years of age or older and completed paid work, worked for your own business or farm, or worked 15 or more unpaid hours at a family owned business during the week the government employment survey is performed. You are also included if you are absent from work due to vaca on, illness, etc. You are unemployed if you are 16 or older, are available for work, and ac vely looked for work during the 4 week period prior to the survey. The number of employed in Douglas County hovered around 21,500 between In 2009, the number of unemployed increased due to the Great Recession. The Source: Local Area Unemployment Sta s cs, Bureau of Labor Sta s cs number of employed is now higher than pre recession levels. 3

6 Industry Employment and Wages The graph above demonstrates employment and payroll data collected from all businesses that are covered by unemployment insurance, around 96% of all employment. Industry employment in Douglas County contracted 0.1% in 2016 when compared to a year earlier, ranking 58th out of Wisconsin s 72 coun es. Wisconsin s employ ment grew by 1.2%, while the Na on s grew by 1.7%. The total amount of pay to those working within Douglas County during 2016 was $595.9 million, 3.9% less than in The percentage decrease ranked 70th out of Wis consin s 72 coun es. The Trade, Transporta on, U li es sector represents 28.1% of the county s job base ranking as its largest employment sector. The sector represents only 19.5% of the state s job base. The second table on this page shows the average wage by industry sector for both Douglas County and the State of Wisconsin. It shows the wage differen al between Wisconsin s average wages and the lower average wage rates of Douglas County. Nine out of 11 industry sectors had below average wages in 2016 when compared to Wisconsin, with the Informa on sector being below 50% of the State wage. However, the Trade, Transporta on & U li es sec tor was 105.9% above the Statewide wage. 4

7 Employment Projec ons Above is a table showing the industry employment projec ons for the Northwest Workforce Investment Development Area (Northwest WDA). Douglas is one of ten coun es found within the Northwest WDA. The ten county area is projected to see a 4% increase with 3,099 employed posi ons. The Self employed and unpaid family workers are projected to have the highest growth with 9%. The Construc on, Financial Ac vi es, and Professional and Business Service sectors are projected to each grow at 6%, making them the second highest projected growth industry sectors in the Northwest WDA in terms of percentage. When viewed by the overall change in employment, Educa on and Health Services is projected to be the largest growth industry in the Northwest WDA. Only three industry sectors are projected to decrease in terms of employment during the me period. The Informa on sector is projected to decline in employment more than any other sector, with a 27% decrease. The Other Services and the Public Administra on sectors are projected to shrink by a smaller 6% and 1%, respec vely. Wisconsin s industry employment projec ons do not look similar when comparing which industry sectors in Northwest Wisconsin are projected to see high decline. Employment in the Informa on Industry is projected to see an 8% growth rate at the state level, while in Northwest Wisconsin, it is projected to see a decline in employment of 27%. Similarly, the Other Services Industry is projected to have a 6% growth rate in the Northwest WDA, but for Wisconsin as a whole, the projected growth rate is a posi ve 6%. In the Public Administra on industry, Wisconsin and the Northwest WDA are both projected to see a small decline in employment of 0.5% and 0.6% respec vely. Total Wisconsin employment is projected to grow by 6%, while in Northwest Wisconsin it is projected to grow by 4%. When examining the U.S. industry employment projec ons and comparing it to Wisconsin s and the Northwest WDA s, the percentage gains and losses are not the same. This should be expected given that the na onal projec ons cover a broader, more diverse economy than at the state and regional levels. The state of Wisconsin and its Northwest region specialize in certain industries. An example is the Manufacturing industry. Its employment at the na onal level is projected to shrink by 7% from In Wisconsin, its employment is projected to grow 1%, and in the Northwest WDA, it is projected to grow 2%. 5

8 Employment ProjecƟons Source: Office of Economic Advisors, Wisconsin Department of Workforce Development, September 2015 The table above is the occupa on projec ons for the Northwest WDA. Adding all occupa ons togeth er, the ten year change in employment is projected to be a posi ve 3,099. Looking at the projected annual aver age openings of 2,434, a minority of 403 is due to growth of new jobs and a majority of 2,031 is due to replace ment of workers in exis ng jobs. The top three occupa on groups, in terms of projected annual total openings, have median annual wages of less than the region s median annual wage of $30,441. However, 58% of the pro jected annual total openings have a median annual wage of higher than $30,441. Also, 63% of the projected av erage annual openings due to growth have a median annual wage of more than $30,441. When looking at the projected 10 year change in employment, 66% of the 3,099 employment increase is in occupa ons with a medi an wage higher than $30,441. This suggests the region is transi oning from an economy of lower paying occupa ons to an economy of higher paying occupa ons. Comparing Northwest s projected numbers with the Wiscon sin occupa on numbers is interes ng. The state s median wage is higher by almost $5,000 at $35,110. But only 33% of the projected annual total openings have a median annual wage of higher than $35,110, and only 36% of the projected average annual openings due to growth have a median annual wage of more than $35,110. When looking at the projected 10 year change in Wisconsin s employment, 39% of the 196,009 employment increase is in occupa ons with a median wage higher than $35,110. 6

9 The occupa on group that is projected to grow the fastest in Northwest Wisconsin is Personal Care and Service occupa ons at 14%. Fueling most of that growth is the Personal Care Aides occupa on with a growth rate of 26%. This occupa on is projected to grow due to the aging of the popula on, needing increasing help with basic hygiene and medical services. The graph above displays Northwest Wisconsin s job base by major industry sector outlining the age distribu on of its job holders. The graph examines job holders age based upon jobs located in Northwest Wisconsin without regard to where the worker lives. One will no ce that the age bands can be quite different industry to industry. Two factors that shape this composi on are labor availability and the occupa onal composi on within the industries. Labor availability is dictated by the overarching age composi on of the popula on and the likelihood of par cipa on in the labor force. The highest par cipa on is likely to occur between the ages of mid twen es to late fi ies/early six es. In short, the region s labor pool should mirror its popula on within this age range. Occupa onal composi on is a more complex factor influenced by a job holder s life stage, experience, educa on/ training, etc. Life stage essen ally refers to age. Younger inexperienced workers tend to work in entry level jobs. These entry jobs are more prominent in some industries than others such as the leisure and hospitality sector. Conversely, some industries require workers to have completed a higher level of formal educa on or training such as workers in the educa on and health care sector, and thus have a low share of the youngest working cohort. More educa on typically equals workers of an age who ve made the me investment. In sum, age demographic analysis in terms of the labor market is not exclusively regulated to examining re rees and low birth rates. It suggests the poten al of the workforce because employment choices are influenced by one s life stage. For More Informa on: Thomas Michels Regional Economist Northwest WDA Phone: (715) thomas.michels@dwd.wisconsin.gov 7