Total personal income (TPI), as defined by the BEA, is the current income of residents of a particular area from all sources. It is measured after deductions of personal contributions to Social Security, but before personal tax deductions have been made. It includes income received from business; federal, state, and local governments; households; institutions; foreign governments; other labor income (such as employers' contributions to private social insurance programs); farm and non-farm proprietor income; dividends, interest, and rent; and transfer payments. It is the only key economic indicator which is adjusted for seasonality; it is not, however, adjusted for price changes.
Because TPI is a measure of income received, estimates of state and local area personal income should reflect the residence of the income recipients. Of the six major components of personal income, three are recorded on a place-of-residence basis. They are transfer payments; dividends, interest, and rental income; and proprietors' income. The data available at the state and county level for wages and salaries, other labor income (OLI), and personal contributions for social insurance, are estimated from data that are recorded by place-of-work.
Four adjustments are made to earnings by place of work to derive total personal income by place of residence. Following these adjustments, total earnings still comprise the bulk of total personal income. Beginning with total labor and proprietor earnings, the first adjustment is made by deducting contributions for social insurance. Although these are considered part of employee total earnings for the current period, social insurance contributions are not received during the current period and are, therefore, not included in personal income.
The second adjustment is made for employee place of residency. The BEA defines employee residency as the location at which the employee is residing while employed. An example of this type of adjustment is a regular occurrence in Sheridan County, Wyoming. Here, a significant number of employees work at coal mines in Montana, but reside in Sheridan County, Wyoming. Earnings for these employees show up as earnings data for Montana. However, in the derivation of personal income by place of residence, an adjustment is made to reallocate these earnings as personal income for Wyoming. This residency adjustment for Wyoming is, therefore, the net effect of all interstate place-of-work versus place-of-residence discrepancies.
A third adjustment is made by appending dividends, interest, and rent income. Dividends are payments in cash or other assets, excluding stock, by for-profit corporations to non-corporate stockholders in the state. Interest is the monetary and imputed interest income of persons from all sources. Rental income is the monetary income of persons from the rental of real property; the imputed net rental income of owner-occupants of non-farm dwellings; and the royalties received by persons from patents, copyrights, and rights to natural resources.
The fourth and final adjustment is the addition of transfer payments. Transfer payments are income payments to persons, generally in monetary form, for which they do not render current services. As a component of personal income, they are payments by governments and businesses to individuals and nonprofit institutions.
Once these four adjustments to the earnings by place of work component are made, the result is total personal income by place of residence. Personal income effectively measures the size of consumer markets. When presented by industry of origin, as in this report, earnings can also be interpreted as a measure of the size of industrial markets.
Per capita personal income (PCI) is calculated by dividing total personal income of the area by the total population of the area. Per capita personal income is a useful tool to compare income across regions, states, and counties. Per capita personal income can also be used to track income growth over time. It is also useful in that it removes the effect of population growth on TPI. Total personal income (TPI), as definedby the BEA, is the current income of residents of aparticular area from all sources. It is measuredafter deductions of personal contributions to SocialSecurity, but before personal tax deductions havebeen made. It includes income received frombusiness; federal, state, and local governments;households; institutions; foreign governments; otherlabor income (such as employers' contributions toprivate social insurance programs); farm and non-farm proprietorincome; dividends, interest, andrent; and transfer payments. It is the only keyeconomic indicator which is adjusted for seasonality;it is not, however, adjusted for price changes.
Employment, as defined by the BEA, is the total number of persons: a) performing any type of labor for pay or profit, b) working at least 15 hours per week on an unpaid basis in family enterprises, and c) temporarily absent for non-economic reasons. Employment under this definition includes all full-time and part-time jobs. The BEA employment count is a measure of occupied jobs, rather than a measure of employed persons. If an individual holds two separate jobs at any given time, the individual is counted twice, since two employment positions are occupied.
Unemployment rates are from the U.S. Department of Labor, Bureau of Labor Statistics (BLS). The BLS employment and unemployment figures are a count of people, not jobs. This is the fundamental difference in methodology between BEA and BLS employment figures. Unemployed persons include those persons who did not work, have made specific efforts to find employment, and were also available for work. The unemployment rate is calculated by dividing the number of unemployed persons by the total civilian labor force. Unemployment rate data is from the Department of Employment, Division of Research and Planning, 246 South Center Street, Box 2760, Casper, WY 82602. Phone (307) 265-6715.
The BEA calculates gross state product (GSP) for a state as the sum of gross state product originating (GSPO) by industry in all industries. This measure of GSP is the state counterpart of the Nation's gross domestic product (GDP) by industry from the national income and product accounts (NIPA's).
The GSPO by industry is the contribution of each industry, including government, to GSP. An industry's GSPO, often referred to as its "value added", is equal to its gross output (sales or receipts and other operating income, plus inventory change) minus its intermediate inputs (consumption of goods and services purchased from other industries or imported).
For each industry, the estimate of gross product is composed of four components (estimated in current-dollars only): (1) Compensation of employees; (2) proprietors' income with inventory valuation adjustment (IVA) and capital consumption allowances; (3) indirect business tax and non-tax liability (IBT); and (4) other, mainly capital related, charges. Most of the compensation and proprietors' income components of GSP are primarily based on BEA's estimates of earnings by place of work, an aggregate in the state personal income series. The IBT component of GSP reflects liabilities charged to business expense, most of which are sales and property taxes levied by state and local governments. The capital charges component of GSP comprises corporate profits with IVA, corporate capital consumption allowances, business transfer payments, net interest, rental income of persons, and subsidies less current surplus of government enterprises.
Current and constant dollar estimates of GSP by industry for Wyoming for 1977-97 are presented.
The data for employment are presented at the one-digit SIC code level, while the income and gross state product information is presented at the two digit level.
The industry classifications represent groupings in accordance with the revised 1987 Standard Industrial Classification Manual, published by the Federal Office of Management and Budget. The Standard Industrial Classification (SIC) was developed for use in the classification of establishments by the type of activity in which they are engaged, for purposes of facilitating the collection, tabulation, presentation, and analysis of data relating to establishments, and for promoting uniformity and comparability. These ten major industrial sectors (one-digit SIC codes) are: 1) agriculture; 2) mining; 3) construction; 4) manufacturing; 5) transportation, communication, and public utilities (TCPU); 6) wholesale trade; 7) retail trade; 8) finance, insurance, and real estate (FIRE); 9) services; and 10) government. For purposes of this classification, an establishment is an economic unit, generally at a single physical location, where business is conducted or where services or industrial operations are performed.
Each establishment is assigned an industry code on the basis of its primary activity, which is determined by its principal product (or group of products) produced or distributed, or services rendered. Ideally, the principal product or service should be determined by its relative share of "value added" at the establishment. In practice, however, it is rarely possible to obtain this measure for individual products or services. Typically, it is necessary to adopt some other criterion which may be expected to give approximately the same results in determining the primary activity of an establishment.
Occasionally, in activity-diversified establishments, the appropriate measure cannot be determined or estimated for each product or service. In some instances, an industry classification based upon the recommended output measure will not adequately represent the relative economic importance of each of the varied activities carried on at such establishments. In such cases, employment or payroll information should be used to determine the primary activity of a particular establishment.
Due to this broad categorization of multi-sector establishments under one SIC code, estimates will frequently be understated in one sector and overstated in another. While this does not influence the accuracy of either county or state totals, it will obviously have an effect upon estimates for a particular sector.
Data from business tax returns, provided by the Internal Revenue Service, are used to generate detailed industrial estimates of self-employed individuals at the national level. At the state level, FICA records on individuals making self-employed contributions are used to get first round estimates by industry.
This has resulted in an increase in the count of self-employed individuals, which was prompted by the following factors. First, those proprietors who were previously only counted once in the Current Population Survey (CPS), but who are in fact proprietors of two or more businesses, are now being counted once for each business. In addition, all persons formerly classified solely as wage and salary employees, but who also spend some time as sole proprietors or participating partners in businesses, are now being counted in each of their multiple positions.