Polk County Labor Market Review

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Alvin Green
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1 Polk County Labor Market Review Polk County has a labor force of approximately 281,000 with 265,000 of them employed as of June The labor force reversed the trend by growing 0.22% between June 2015 and June 2016 while employment grew by 0.93%. During this period the unemployment rate fell from 6.4% to 5.8%. Although labor force participation fell slightly, the decrease was outpaced by increases in employment. While Polk County lagged the state and nation in labor force growth and employment growth, we continue to see gains in overall unemployment. We should expect that the nation and state will level off around 5% unemployment as this is typically considered full-employment. Once we catch up with the larger geographies, the lack of excess labor supply should put upward pressure on wages and encourage previously discouraged workers back into the labor force. While we are well past the bottom of the recession, we still suffer from some lingering effects, including a labor force that has not kept pace with population growth. Labor Force Statistics Polk County Florida U.S. Labor Force June ,864 9,773, ,135,000 June ,251 9,691, ,283,000 % 0.22% 0.85% 1.17% Number Employed June ,695 9,291, ,990,000 June ,254 9,149, ,645,000 % 0.93% 1.55% 1.57% Number Unemployed June 16 16, ,728 8,144,000 June 15 17, ,500 8,638,000 % % % -5.72% Unemployment Rate June % 4.9% 5.1% June % 5.6% 5.5% % -9.38% % -7.27% Polk County continues to improve from the depths of the recession, with strong year-over-year gains. Polk County, like most of Florida, is more sensitive to changes in the macro-level economy than the

2 Unemployment Rate nation as a whole, both on the upside, but also on the downside. Florida has pulled nearly even with the nation and Polk County is not far behind. With the natural rate of employment historically hovering between 4.5% and 5%, it is not expected that the state and nation will have much more room for improvement, while Polk is expected to continue to improve. 14.0% Unemployment Rate by Geography - Not Seasonally Adjusted 12.0% 12.9% 10.0% 8.0% 6.0% 4.0% 5.8% U.S. Florida Polk 2.0% 0.0% While Average Weekly Earnings grew steadily at the national level, Florida earnings dipped slightly during the recession and Polk County dipped significantly. During the recession, average weekly wages in Polk County fell to approximately $598 in February of 2008, but have since peaked at $836 and fell back to $762. The spike and pull back are a bit atypical, but given the small size of the county relative to the state and country, the variability is not completely surprising. As can be seen from the graph, Polk County has regained and exceeded its average gap relative to the state. It is currently fluctuating around the state level. Relative to the nation, Polk County climbed to 87%, versus an 84% average from 2007 to 2015.

3 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Axis Title Average Weekly Earnings for Private Workers Polk County Florida U.S. Looking at employment by industry, Polk County continues to have lower employment levels in Information but has made gains in recent years in Business and Professional Services relative to Florida and the nation. While gains have been made, Polk County continues to lag the state in Leisure and Hospitality. Polk County has a higher employment level in Transportation and Utilities than Florida and the nation and a higher level of employment in Manufacturing than Florida. Employment Levels by YTD (July) 2016 (1,000s) Polk County Florida U.S. (Non-Farm) , ,183.0 Mining, Logging and Construction 12.1 (5.8%) (5.6%) 7,608.0 (5.3%) Manufacturing 16.8 (8.1%) (4.3%) 12,375.0 (8.6%) Wholesale Trade 10.3 (4.9%) (4.1%) 5,956.5 (4.1%) Retail Trade 27.6 (13.2%) 1,097.3 (13.3%) 15,976.8 (11.1%) Transportation and Utilities 15.1 (7.2%) (3.3%) 5,413.5 (3.8%) Information 1.6 (0.8%) (1.6%) 2,791.0 (1.9%) Financial Activities 12.7 (6.1%) (6.8%) 8,379.0 (5.8%) Professional and Business Services 30.3 (14.5%) 1,276.6 (15.5%) 20,372.0 (14.1%) Education and Health Services 28.8 (13.8%) 1,229.4 (14.9%) 22,371.0 (15.5%) Leisure and Hospitality 23.0 (11.0%) 1,171.6 (14.2%) 16,258.0 (11.3%) Other 5.8 (2.8%) (4.1%) 5,758.0 (4.0%) Government 24.3 (11.7%) 1,014.6 (12.3%) 20,924.0 (14.5%)

4 The growth by industry can be further broken down by using shift share analysis, which separates changes in employment levels by a national component, industry component and a local component. This analysis isolates the change in employment attributable to the local economy after subtracting out overall employment growth and national change in the industry s employment level net of the overall national change to 2016 (July) Shift Share Analysis For Polk County Relative to the U.S. % National % National % % 5.7% 11, % 7, % - 1.8% 3,471 Mining, Logging and Construction 6.1% % % (42) 2.6% 295 Manufacturing Wholesale Trade 2.4% % % (488) 1.5% % % % (213) 6.7% 641 Retail Trade 5.7% 1, % 1, % (15) 1.9% 492 Transportation and Utilities 12.7% 1, % % % 1,087 Information 0.0% - 3.9% % (32) -1.9% (30) Financial Activities 8.5% 1, % % % 525 Professional and Business Services 12.6% 3, % 1, % % 1,745 Education and Health Services -3.0% (900) 3.9% 1, % % (2,674) Leisure and Hospitality 12.7% 2, % % % 1,473 Other Government 5.5% % % (93) 3.2% % (300) 3.9% % (565) -2.8% (699) This analysis shows that between July 2014 and July 2016, Polk County has seen significant declines in Government and Education and Health Services relative to national growth, losing 699 and 2674 jobs, respectively, attributable to the local component. The decline in Education and Health Services jobs is particularly concerning considering that in nominal terms Polk County is shrinking while the nation is growing. These relative job losses are responsible for Polk County lagging the nation in overall distribution of Education and Health Services jobs. This will be discussed in more detail in the Detailed

5 Shift Share Analysis report. In contrast, Polk County has grown meaningfully faster in Professional and Business Services, Leisure and Hospitality and Transportation and Utilities. The continued growth in Professional and Business Services is a particularly bright spot as the county underperformed the nation for nearly the decade prior to last year. When doing a similar analysis against the industry growth in Florida, Polk County is lagging the incredible 7% growth in total non-farm jobs in the state. By industry, Polk County is lagging behind in Mining, Logging and Construction, Manufacturing, Government and Education and Health Services. The deficits in Education and Health Services is even more pronounced than the deficit relative to the nation. The most notable bright spots are in Professional and Business Services, as these jobs are typically above the county s median wage, and in Leisure and Hospitality, where Polk is taking advantage of our location and getting in the theme park business through LEGOLAND to 2016 (July) Shift Share Analysis For Polk County Relative to Florida % State % State % % 5.7% 11, % 13, % % (2,585) Mining, Logging and Construction 6.1% % % % (890) Manufacturing Wholesale Trade 2.4% % 1, % (118) -3.8% (628) 8.4% % % (305) 4.6% 441 Retail Trade 5.7% 1, % 1, % (54) -1.0% (270) Transportation and Utilities 12.7% 1, % % (130) 6.7% 894 Information 0.0% - 7.0% % (146) 2.1% 34 Financial Activities 8.5% 1, % % (52) 2.0% 234 Professional and Business Services 12.6% 3, % 1, % % 617 Education and Health Services -3.0% (900) 7.0% 2, % % (3,204) Leisure and Hospitality 12.7% 2, % 1, % % 876 Other Government 5.5% % % (143) 1.1% % (300) 7.0% 1, % (1,263) -3.1% (757)

6 Polk County maintains a competitive advantage for employers in average wages compared to Florida in most industries. Polk County s wages are particularly low relative to the state levels in Information, Financial Services and Leisure and Hospitality. The lower wages provide an opportunity for employers that wish to capitalize on the lower operating component cost coupled with the lower cost of living relative to the state. Estimated Annual Wages by (2015) Polk County Florida % Difference Natural Resources and Mining $36,483 $30,747 19% Construction $43,423 $45,785-5% Manufacturing $49,914 $57,361-13% Trade, Transportation and Utilities $37,478 $41,448-10% Information $47,391 $73,696-36% Financial Activities $50,398 $68,611-27% Professional and Business Services $42,873 $55,803-23% Education and Health Services $43,185 $48,205-10% Leisure and Hospitality $17,513 $23,909-27% Natural Resources and Mining $36,483 $30,747 19% Average (Private Employment) $39,075 $45,562-14% By 2024, the Bureau of Labor Statistics is projecting overall employment growth to be 6.5%, with healthcare and technical occupations leading the way. The projected population growth, changing demographics and expectations of a growing healthcare field should favor Polk County as the decade progresses. Hopefully the national pressure on healthcare will reverse our two-year trend of declining jobs. We continue our shift away production occupation and towards services, although we should expect continued need for construction to provide housing and infrastructure.

7 National Employment Growth by major occupational group, 2014 and projected 2022 (Numbers in thousands) Percent, , all occupations 6.5 Healthcare support occupations 23.0 Healthcare practitioners and technical occupations 16.4 Personal care and service occupations 13.2 Computer and mathematical occupations 13.1 Community and social service occupations 10.5 Construction and extraction occupations 10.1 Business and financial operations occupations 8.4 Education, training, and library occupations 7.6 Life, physical, and social science occupations 7.4 Food preparation and serving related occupations 6.5 Installation, maintenance, and repair occupations 6.4 Building and grounds cleaning and maintenance occupations 6.2 Management occupations 5.5 Legal occupations 5.1 Sales and related occupations 5.0 Transportation and material moving occupations 4.8 Protective service occupations 4.5 Arts, design, entertainment, sports, and media occupations 4.1 Architecture and engineering occupations 2.7 Office and administrative support occupations 2.0 Production occupations -3.1 Farming, fishing, and forestry occupations -5.9

By Sarah Pilipaitis, CT DOL Economist

By Sarah Pilipaitis, CT DOL Economist THE CONNECTICUT ECONOMIC DIGEST Vol.21 No.5 A joint publication of the Connecticut Department of Labor & the Connecticut Department of Economic and Community Development MAY 2016 IN THIS ISSUE... Connecticut