Idaho Welder Wages Lag U.S., Neighboring States

A lack of welders in Idaho could have more to do with what they are being paid in surrounding states according to a cross-state comparison of wages.

Welding employment varies by state and over time. Nationally, the number of welders has been fairly stable since 1998 with the exception of 2008 when the previous expansion swelled payrolls almost 11 percent before they declined back to 352,000 in 2013.

States throughout the Mountain West benefited from the last expansion, but performances in 2013 were mixed. All recorded declines in welders, but not back to 1998 levels. Oregon, the only exception, lost more than 1,700 welding jobs, and Washington, Idaho and Utah were slightly over 37 percent higher than in 1998. The number of welders in Montana was up 44 percent, Nevada 52 percent and Utah 100 percent. North Dakota, because of its booming natural resources industry, did not experience a loss and in fact continued expanding, adding another 480 welders by 2013.

Washington has the most welders, but it also has the most total employment, or all jobs. Utah, which ranked third in total employment, followed ahead of Oregon. Idaho ranked fifth regionally but came in behind North Dakota to rank sixth.

To control for the difference in total employment, location quotients measuring the concentration of welding jobs in each state and the nation were added. Values above one signify a higher concentration than the national average while those below one a lower concentration. While Washington has the highest welding employment in the region, it was not as concentrated as the nation. Idaho had around the national average in 1998 and 2003 before increasing to 1.41 in 2008. The employment decline in welding by 2013 was more pronounced than it was for many other occupations in Idaho, causing the location quotient to fall to 1.29. All regional states and North Dakota recorded declines in welding employment concentration except for Nevada and Montana, which increased to roughly the national average. While North Dakota is cited often as a strong state for welding employment, Wyoming has a notably higher concentration at over three times the national average.

Wages quickly reveal differences among the states. While many factors go into determining a wage such as industry conditions, a common practice is to pay a higher wage to those more highly skilled in an occupation. Under that scenario, wages were analyzed at the 10th, 50th and 90th percentiles. The 10th percentile represents the entry level, 50th percentile equates to journeyman-level skills and the 90th percentile reflects a master of the craft who perhaps has responsibilities beyond welding. Data from the Occupational Employment Statistics program was used to show a state’s percent of the national wage rate at each level. Percentages above 100 signify more was being paid than the national average. This method of analyses makes time series comparisons possible and eliminates the effect of inflation on the numbers.

Welders table 1

For entry level welders, North Dakota was paying the most of the states analyzed at 123.4 percent of the national average, but only slightly higher than Wyoming at 123 percent and Washington at 120.5 percent. North Dakota also showed consistent growth in wage levels, rising from the national average in 1998 and 2003 to 109 percent in 2008 to the highest of the states in 2013. Idaho was last for entry level welders at almost 13 percentage points below the national average, but considerably better than 2008 levels, nearly 20 percentage points below the national average.

Welders table 2

The picture changes slightly for journeyman-level welders with Wyoming paying the most – 25 percent higher than the national average. North Dakota is next followed closely by Washington with both around 117 percent of the national average. North Dakota did not have the same growth in wages. Most of its growth came between 2008 and 2013. Wyoming increased its pay relative to the nation back in 2008. Idaho landed in last place again for pay, just behind Montana. Both states were paying between 91 percent and 92 percent of the national average in 2013 but they got there by different paths. Idaho’s welding wages compared to the nation took a dip in 2008 before recovering in 2013. Montana had a jump in 2008 before declining relative to the nation in 2013. Idaho’s journeyman welders make $6 an hour less than their Wyoming counterparts.

Welders table 3

At the 90th percentile, the top states shuffled. North Dakota was back on top, paying its best welders $39.05 an hour, 42 percent more than the national rate of $27.46. Wyoming was a distant second at 28 percent over the national rate at $35.23 an hour, while Nevada was third at 25 percent over the national rate at $34.38 an hour. While Nevada’s top paid welders have been consistently 20 percent above the national average wage, North Dakota’s welders only recently saw that increase while Wyoming’s came in 2008 when its median wage jumped. Idaho fell to last again, and unlike its wages at the other levels, Idaho was notably below Oregon. Unlike the two previous wage levels, Idaho welders at the top of the wage brackets lost ground to the nation, dropping from 91.2 percent to 86.9 percent.

Welders table 4

Cost of living is often cited as a main contributing factor to Idaho’s lower wages. Based on the highest and lowest index levels for the metropolitan areas analyzed by The Council for Community and Economic Research, Idaho does have one of the lowest costs of living, mostly due to low housing costs, but other than some areas in Washington and Oregon, most states are fairly close to one another. Comparisons of the data, however, are not exact since researchers use judgment sampling to choose products to compare. The index also reflects households in the top income quintile.

Welders table 5

Education availability is another factor that may affect the number of welders in the state. Even though the typical entry requirement for welders, according to the U.S. Bureau of Labor Statistics, is a high school diploma or equivalency, manufacturers commonly seek some postsecondary education. Data compiled by the National Center for Education Statistics for the number of people completing the CIP 48.0505 Welding Technology/Welder course show nationally, there was a marked increase in welding completers. Regionally, Washington accounted for the largest number of completions – in 2012 they were 13 times the number in 1998. Oregon, Wyoming and Montana also recorded solid growth. Utah, while having the second most completers in welding programs, dropped considerably in 2003 and 2008 but had recovered to the 1998 level in 2012. North Dakota, with its sharp welding employment and wage growth did not see much of an increase in training program completions. Idaho also had little growth in the number of those completing welding programs.

Welders table 6

The type of program, though, is different nationally from what is seen regionally. In 2012, the most common type of award in the United States was in programs lasting less than an academic year followed by programs between one and two years in length. Regionally, the shortest programs were again the most common, but those resulting in an associate degree made up 25 percent of the total – considerably more than the 7.6 percent of all the programs in the U.S.

Welders table 7

Overall there is some weight in the argument for competitive wages in the state. Idaho consistently raked at the bottom compared to bordering states – especially at the higher percentiles. It is possible skilled welders are willing to relocate to areas with higher wages. In the case of North Dakota and Wyoming, both states more than doubled their welding employment since 1998, with a growth rate considerably faster than other occupations, leading to much higher location quotients. North Dakota and Wyoming are also the two states paying the most at all skill levels.

Completion data also show fewer people are choosing to seek welding training in Idaho compared to other states – especially Washington. This same data source shows North Dakota is also near the bottom of this list for welding program completions, indicating the growth is the result of welders migrating from other states.

Andrew.Townsend@labor.idaho.gov, regional economist
(208) 332-3570, ext. 3455