How Well Have Rural and Small Metropolitan Labor Markets Absorbed Welfare Recipients?. Employment and Wages

04/01/2001

1. Low-Skill Employment and Wages: 1993 to 1996

Exhibit 5.1 presents the percentage change in employment and wages by skill level between 1993 and 1996. As this exhibit shows, there was a sizeable increase in low-skill employment in all regions except the New York regions between 1993 and 1996, which experienced a decline in population between these two years. Five of the 12 regions experienced a low-skill employment increase of more than 10 percent, and 10 of the 12 regions experienced a low-skill employment increase of more than 5 percent. The largest employment increase was in Eau Claire, Wisconsin at 15.5 percent; low-skill employment declined by 0.3 percent in North County, New York. The average increase in low-skill employment for the 12 regions was 9.2 percent, compared to a national average of 8.7 percent.

However, low-skill wages (in 1998 dollars) declined in 8 of the 12 regions between 1993 and 1996. The biggest decline was in Central Oregon at 3.8 percent. The average decrease in low-skill wages for the 12 regions was 0.4 percent, compared to a national average of 0.1 percent. Changes in employment were not closely related to changes in wages. For example, low-skill employment increased by roughly the same amount in Alabama and Southeast Missouri (9.2 and 9.3 percent, respectively), but low-skill wages declined by 0.8 percent in Alabama and increased by 0.4 percent in Southeast Missouri. We think this was due to the variation in the supply and demand forces that were responsible for the changes across regions.

Exhibit 5.1
Percent Change in Employment and Wages by Skill Level, 1993-1996
Region Employment Wages
Low Skill (%) Medium Skill (%) High Skill (%) Low Skill (%) Medium Skill (%) High Skill (%)

Decatur and Florence, Alabama

9.2 4.1 6.5 -0.8 2.9 -0.8

Rural Mississippi

13.5 5.9 9.5 1.2 5.3 1.7

Joplin, Missouri

10.8 6.5 11.0 6.6 5.3 1.9

Southeast Missouri

9.3 4.9 11.1 0.4 5.6 1.4

Jamestown, New York

1.9 -1.2 1.1 -2.7 0.3 -2.2

North Country, New York

-0.3 -0.2 4.1 -0.4 2.2 -2.7

Medford-Ashland, Oregon

12.8 10.0 13.7 -1.8 1.0 -0.8

Central Oregon

14.0 12.1 15.4 -3.8 -1.0 -0.8

Florence, South Carolina

8.1 0.5 12.6 -0.5 2.5 -0.5

Vermont

7.4 5.7 7.6 -2.0 1.4 -1.7

Eau Claire, Wisconsin

15.5 13.0 14.2 -1.5 0.8 -2.0

Wausau, Wisconsin

8.6 9.9 11.0 1.0 2.1 1.8

Average

9.2 5.9 9.8 -0.4 2.4 -0.4

United States

8.7 5.7 8.3 -0.1 2.8 0.7

Source: Lewin calculations using ES-202, NISP, and BLS education and training requirements data.
Note: Percentage change calculated as a difference of the logs.

2.Low-Skill Employment and Wages: 1996 to 1998

Exhibit 5.2 presents the percentage change in employment and wages by skill level between 1996 and 1998. While low-skill employment increased in all regions between 1996 and 1998, the increases were generally less pronounced than between 1993 and 1996 in most regions. None of the 12 regions experienced a low-skill employment increase of more than 10 percent. Seven of the 12 regions experienced low-skill employment increases of more than 5 percent. The largest employment increase was in Medford-Ashland, Oregon (8.1 percent) and the smallest increases were in Jamestown, New York and Decatur and Florence, Alabama (2.5 percent each). The average increase in low-skill employment for the 12 regions was 5.7 percent, compared to a national average of 7.1 percent.

Low-skill wages increased in all 12 regions between 1996 and 1998. The largest increase was in Eau Claire, Wisconsin (6.2 percent). The average increase in wages was 2.1 percent, compared to a national average of 3.8 percent. Again, changes in wages and employment were not closely related. For example, Decatur and Florence, Alabama and Jamestown, New York had the same low-skill employment increases (2.5 percent), but very different low-skill wage increases (1.1 and 3.0 percent, respectively). It appears that the supply and demand forces behind the employment increases varied across the areas.

Exhibit 5.2
Percent Change in Employment and Wages by Skill Level, 1996-1998
  Employment Wages
Region Low Skill (%) Medium Skill (%) High Skill (%) Low Skill (%) Medium Skill (%) High Skill (%)

Decatur and Florence, Alabama

2.5 -1.9 2.3 1.1 2.6 1.4

Rural Mississippi

6.8 1.6 0.2 1.9 6.6 5.7

Joplin, Missouri

7.9 5.3 6.0 1.4 3.7 3.9

Southeast Missouri

4.8 2.1 4.0 0.8 3.4 1.9

Jamestown, New York

2.5 -1.0 1.7 3.0 5.2 3.7

North Country, New York

4.5 0.7 3.4 2.3 6.8 3.4

Medford-Ashland, Oregon

8.1 4.9 6.1 2.1 4.0 3.8

Central Oregon

7.5 4.7 8.5 1.7 5.4 4.4

Florence, South Carolina

6.4 3.3 8.0 0.6 5.3 3.3

Vermont

5.0 2.3 3.2 2.5 7.1 3.9

Eau Claire, Wisconsin

4.4 6.9 5.3 6.2 6.2 7.1

Wausau, Wisconsin

7.4 3.0 4.1 1.9 4.7 5.2

Average

5.7 2.7 4.4 2.1 5.1 4.0

United States

7.1 2.9 5.3 3.8 7.5 6.8

Source: Lewin calculations using ES-202, NISP, and BLS education and training requirements data.
Note: Percentage change calculated as a difference of the logs.

3.Changes by Other Skill Levels

Employment and wages in medium-skill and high-skill occupations followed the same trends as employment and wages in low-skill occupations. Over time, the increase in employment was higher in the 1993 to 1996 period than in the 1996 to 1998 period at all skill levels while the increase in wages was higher in the 1996 to 1998 period than in the 1993 to 1996 period at all skill levels.

Employment in low-skill occupations increased more than employment in medium-skill occupations in both the 1993 to 1996 and 1996 to 1998 periods and more than employment in high-skill occupations in the 1996 to 1998 period. Wages in low-skill occupations increased less than wages in medium-skill occupations in both the 1993 to 1996 and 1996 to 1998 periods, and less than wages in high-skill occupations while in the 1996 to 1998 period.