Economics

From Sustaining Jackson Hole Wiki

Teton County’s economy is comprised of five major components: tourism, investments, professional services, real estate and construction.

The makeup of the economy has changed significantly since the late 1980s, shifting from one largely reliant on tourism to one driven much more by investment income and, to a lesser degree, professional services. While tourism is still a major factor in the local economy, it has been overshadowed by income from investments and professional services.

Historically, Jackson Hole’s economy has evolved through four distinct cycles: hunter-gatherers; agriculture and cattle ranching; tourism; and the present-day shift from tourism toward investment income and professional services.

Prior to the late 1800s, nomadic Native Americans who visited Jackson Hole seasonally based their economy on hunting and gathering. The valley’s first white residents settled the area in the late 1800s and early 1900s, using agriculture – primarily cattle ranching – as their economic base. With the advent of the automobile, tourism quickly became a factor in the economy thanks to the beauty of the Jackson Hole area. Early dude ranches like the Bar BC, which was located in what is now the heart of Grand Teton National Park, sprang up in the 1910s and 1920s.

Tourism grew in economic importance for 50 years as more and more people visited the area during the summer, but agriculture remained the mainstay for many valley residents. From an economic standpoint, the valley was largely depressed from fall through spring, which paved the way in the 1960s for Paul McCollister and Alex Morley to obtain a federal economic development loan to open the Jackson Hole Ski Area. It was the ski area’s opening in 1966 that ultimately tipped the balance from agriculture to tourism by allowing tourism on a more year-round basis.

Teton County’s final and most recent major economic shift took hold during the 1990s. During that decade, despite little tourism growth, the valley’s resident population and per-capita income boomed. Most notably, per-capita income grew at a rate roughly five times that of the country as a whole. (See graphs 4-1 through 4-4.) Many new residents brought wealth with them either from personal sources or by providing professional services. While tourism remains a major economic force in Teton County, it is now firmly in second place to these new sources of income. (For more on tourism, investments and professional services, see pages 21 and 22.)

Other trends in Teton County’s economy include a very low unemployment rate, a decrease in relative importance of the retail and lodging sectors compared to categories such as finance and other professional services, a recent rebound in taxable sales after a flattening starting in 2001 (a flattening which started before the terrorist attacks in September of that year), and a high cost of living. (See graphs 4-7 through 4-14.)

Sources: Internal Revenue Service, State of Wyoming

Graph 4-1 Over the course of the 1990s, Teton County’s adjusted gross income rose roughly 240 percent. Part of the income increase was due to population growth, though a much larger part was due to wealthy residents moving into the area. Drops in the last couple of years reflect Teton County’s dependence on investment income during a down period for securities markets. Source: Internal Revenue

Service Graph 4-2 A rapid increase in Teton County’s total income in the 1990s produced a corresponding increase in per capita income, which grew about 150 percent in 9 years. Per capita income has declined with total income. Source: Internal Revenue Service

Graph 4-3 During the 1990s, Teton County's overall wealth increased, but it increased much more rapidly in the upper income brackets. This trend is demonstrated by how much more rapidly the county's mean, or average, income grew compared to is median income. Source: Internal Revenue Source

Graph 4-4 In the 1990s, Teton County’s mean adjusted gross income grew at about five times the rate of the United States and Wyoming. Because Teton County is much more reliant on investment income than the state or nation, its per capita drop has been sharper. Source: Internal Revenue Service

Graph 4-5 Between 1994 and 2002, investment income accounted for over half of Teton County residents’ combined income; in 2003, investments accounted for only one-half, a function of weak performance in the financial markets. During the past decade, capital gains have accounted for an increasingly large share of residents’ investment income. Source: Internal Revenue Service

Graph 4-6 Comparing Teton County’s adjusted gross income by type to the U.S. and Wyoming shows that the three different jurisdictions have very different income structures. Wages comprise roughly 3 out of every 4 dollars earned in the nation and state; they comprise only half of the dollars earned in Teton County. Source: Internal Revenue Service

Graph 4-7 As Teton County’s economy shifts away from its reliance on tourism, there is a corresponding decrease in the importance of retail jobs and wages, and an increase in the importance of service- and finance-sector jobs and wages. (Note: part of the decline in Retail earnings was due to wages paid by restaurants and bars now being classified as “Services.”) Source: U.S. Bureau of Economic Analysis

Graph 4-7a In 2003, Teton County ranked 10th among all US counties in the number of jobs per resident, with local employers providing 1.26 jobs per resident. Nationwide, only 19 counties offer more jobs than residents, a distinction Teton County has held since 1986. Such data were first tracked in 1969, and Teton County has always rated in the top 1 percent of all American counties in jobs/resident. Source: U.S. Bureau of Economic Analysis

Graph 4-8 Because Teton County has far more jobs than permanent residents, almost anyone who wants a job can find one. The result is a low unemployment rate. There are two reasons for the high number of jobs relative to permanent residents: many residents work more than one job; and many people commute from other counties to work in Jackson Hole. Source: State of Wyoming

Graph 4-9 Comparing Teton County residents’ employment by category between 1990 and 2003, the primary change is in the 50 percent relative increase in real estate and finance jobs. That service sector jobs stayed stable and retail jobs shrank is in part due to the 2001 re-classification of restaurants from Retail to Services. Source: U.S. Bureau of Economic Analysis

Graph 4-10 Along with growth in income, jobs and population, Teton County during the 1990s experienced growth in taxable sales (the primary revenue source for local government). This has allowed local government to fund more programs. Taxable sales growth started flattening in 2001 (before the terrorist attacks of 9/11), but picked up again in mid-2004. Source: State of Wyoming

Graph 4-11 Because Wyoming doesn’t have an income tax, state and local government are heavily reliant on sales taxes for their revenues. As services aren’t subject to sales tax, in Teton County the Retail and Services sectors disproportionately fund local government. In Teton County, tourists account for roughly 40 to 50 percent of all taxable sales. This helps explain why there is so much interest in tourism among government circles, even as tourism becomes an increasingly smaller part of Teton County’s economic picture. Source: State of Wyoming

Graph 4-12 From a sales tax perspective, summer is still the community’s key economic season, a function of Jackson Hole’s tourism economy. From that same perspective, the winter and shoulder seasons are roughly equal in importance. Source: State of Wyoming

Graph 4-13 The U.S. Consumer Price Index is the federal government’s measure of inflation. Since 1991, the nation’s annual inflation rate has ranged from 1.6 to 5.4 percent. There is no reliable Teton County-specific measure of inflation, but with the exception of housing, the county’s cost of living seems to track well with the western U.S.-specific CPI. Source: U.S. Department of Commerce