Unearned Income, Government, Semiconductors Drive Idaho Employment

Idaho’s major economic drivers include government, construction, computer chip manufacturing, the food products cluster and unearned income from Idaho households.

In 2012, 146,000 jobs or 23.5 percent of all Idaho jobs were generated by unearned income – money the state’s households received from outside sources in pensions, Social Security, returns on investments, food stamps, welfare payments, unemployment benefits and other so-called transfer payments.

Government was the next strongest economic force, supporting nearly 16 percent of all employment both regionally and statewide.

Only a small fraction of those jobs were attributable to people commuting to work outside of Idaho.

These findings are based on an analysis using economic base theory, which determines whether economic activity generates revenue from outside the local economy or merely recirculates existing revenue.

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Idahoans Showed Frugal Spending During the Recession

Idaho residents cut back personal consumption expenditures during the recession by a greater percentage than all but two other states.

Estimates from the U.S. Bureau of Economic Analysis show Idahoans reduced their per capita personal consumption spending 5.8 percent between 2007 and 2009. Nationally the reduction in per capita personal consumption spending was less than 1 percent. Only Nevada with a reduction of 7.9 percent and Arizona with a reduction of 6.4 percent posted greater cutbacks.

Nationally, per capita personal consumption spending on the essential items rose 3.6 percent between 2007 and 2009 – $523 to $14,874 – while spending on nonessentials fell 4.4 percent – $791 to $17,191. Twenty-four states and the District of Columbia saw per capita personal consumption continue to increase during that period.

In most states, per capita spending declined for nonessential items to offset continued increased spending for the essentials – food at home, gasoline and energy, health care, housing and utilities.

Idaho, however, is one of only six states where per capita personal consumption spending fell for both essentials and nonessentials. Idaho’s 3.3 percent drop in per capita personal consumption spending in essentials – $575 to $13,418 – was the largest decline except for Nevada’s 3.9 percent reduction. The state’s 8.1 percent cut in nonessential spending – $1,257 to $14,268 – was exceeded by four other states.

Idahoans cut per capita spending for housing and utility costs from $6,071 to $5,753, or 5.2 percent, to cover a $187 per capita increase in health care costs – 6.6 percent to $4,012 in 2009. The reduction in spending on housing and utilities was the third steepest in the country.

They also cut their food spending $119 to $2,484 per capita, or 4.6 percent, and decreased  gasoline and energy spending by over 15 percent to $1,169 per capita. Idaho was one of just three states where food spending was cut, and its 4.6 percent reduction was the deepest of the three.

Since 2009, Idaho’s per capita personal consumption spending has increased with essential items rising faster. Spending on essentials rose 11 percent by 2012 compared to a 10.1 percent increase nationally. Idaho’s per capita spending reflected a further, albeit slight, 0.3 percent decrease in housing and utilities, reflecting the persistence of low housing costs after the housing bubble burst in 2006.

But spending was up 4.8 percent on food as the U.S. Department of Agriculture’s estimate of Idaho households facing food insecurity in 2012 hit 14.3 percent. The 2.7 percentage point increase from 2009 was greater than all but six other states, according to the Agriculture Department report.

Health care spending in Idaho was up 17 percent – the fourth largest increase behind North Dakota, South Dakota and South Carolina. Nationally, health care spending rose 11 percent per capita.

Energy saw the largest Idaho increase among the essentials at nearly 59 percent from 2009. Only North Dakota, Oklahoma and the District of Columbia had greater increases. The national increase was 43 percent.

Idaho’s per capita spending on nonessentials rose 7.2 percent between 2009 and 2012, and at $15,301 was only $77 higher than in 2007.

Changes in personal consumption expenditures followed the state’s per capita personal income, which ranked 44th nationally in 2007, but after falling 4.3 percent by 2009 – the fifth steepest decline nationally – per capita income rose just 9 percent by 2012 to $34,481 to rank Idaho 50th among the states and the District of Columbia. Only seven other states posted smaller increases between 2009 and 2012.

Idaho per capita expenditures

Per Capita expenditure nation by state

Per Capita Non essential expenditure by state

Bob.Fick@labor.idaho.gov, regional economist
(208) 332-3570 ext. 3628

Teton County’s Growing Population Puts Pressure on Employment, Wages

Teton County is one of Idaho’s smallest counties. The largest of its three cities – Victor – has fewer than 2,000 residents. Its proximity to the Grand Targhee and Jackson Hole ski resorts makes it a bedroom community to year-round tourist destinations. As such, Teton County has experienced unique changes as the national economy continues to improve.

Population Growth

Economic Modeling Specialists International estimated Teton County’s 2014 population at 11,067, less than 1 percent of the state’s population. Over the past five years, however, the county’s population has grown more than 10 percent, outpacing the state’s growth rate by 4 percentage points. And as the county population increased, so has the demand for labor.

Job Growth

Job growth in Teton County has been much higher than job growth statewide. While Idaho’s statewide private sector growth grew jobs by 3.9 percent from the first quarters of 2013 and 2014, Teton County’s private sector added 178 new jobs, a 10.4 percent increase.

As a result, some Teton County employers have had a difficult time filling openings.

TableCost of Living in Teton County

Teton County’s cost of living in relation to household income is significantly higher than the rest of the state and surrounding areas.

The average mortgage payment accounts for 33.2 percent of Teton County’s average household income, compared with less than 25 percent for the state. Although housing costs are significantly higher in neighboring Jackson Hole, Wyo., the average mortgage payment only accounts for 27.6 percent of the average household income leaving more money available for discretionary spending.

housing costs as percent

Teton County’s average cost of living for renters is also higher than the statewide average or in in Jackson Hole, WY. Average gross monthly rent in Teton County is 16.3 percent of the average household income while gross monthly rent accounts for 12.1 percent in Jackson and 14.4 percent for Idaho.

The higher cost of housing coupled with lower paying jobs has caused the county’s workforce to seek employment elsewhere, causing what feels like a worker shortage.

Inflow Outflow

In 2011, the Census Bureau reported that 61.2 percent of the available workforce in Teton County were employed outside the county, with only 38.8 percent of the workforce working in the county where they live.

One in five workers from Teton County works in Wyoming, most in Jackson Hole. Driggs, Teton’s county seat, employed one in five.

Tetons workforce

Having so many people leave the area can significantly impact an employer’s ability to fill jobs, putting an upward pressure on wages.

Wage Growth

Average private sector wages in Teton County increased 8.2 percent from the end of the first quarter of 2013 to the end of the first quarter 2014, nearly twice as much as the state’s wage increase of 4.3 percent, according to BLS and census data. From 2011 to 2013, growth in average pay for new hires in Teton also outpaced the state’s growth rate. In Teton County, average pay for new hires increased 4 percent while average new hire pay increased 2 percent statewide.

Despite the accelerated growth in wages, the average wage in Teton County still falls 20 percent short of Idaho’s statewide average wage  and 40 percent below the average wage for Jackson Hole, Wyo.

As long as the benefits outweigh the costs of commuting to work, Teton County’s workforce will continue to commute, leaving jobs unfilled. But the longer jobs remain unfilled, the greater the pressure will be to increase wages, making it attractive for workers to remain in the county.

Christopher.StJeor@labor.idaho.gov, regional economist
(208) 557-2500 ext 3077

Idaho Ranked 6th in Nation in Patents Per Capita

Idaho is among the nation’s leaders in innovation.

While the state only ranks 27th in the number of patents issued in 2013, on a per capita basis it ranks sixth, reflecting how truly innovative Idahoans are.

Micron Technology Inc. develops the largest number of patents followed by Round Rock Research, both based in Boise. The Idaho National Laboratory’s manager, Battelle Energy Alliance, also contributes a large number of patents.

But there is a significant contribution in individual patents. The Coeur d’Alene metropolitan area had 18 patents in 2011 – the most in a given year over the past decade. Bluewater Technologies in Hayden was responsible for a few, but most were from individuals. Continue reading

September Economic Activity Around Idaho

Information provided in this article has been gathered from various sources throughout the state, including local newspapers and other media.

Statewide
Northern Idaho
North Central Idaho
Southwestern Idaho
South Central Idaho
Southeastern & Eastern Idaho

STATEWIDE DEVELOPMENTS

  • For the first time since 1996, cheese is Idaho’s largest export. Milk products have always been a major export with whey and dry milk powder leaders. Almost three-quarters of Idaho’s dairy production is in southern Idaho, where several large milk product plants including Chobani and Glanbia are located. Idaho was the fourth-largest dairy producing state in the nation last year after New York, California and Wisconsin. This year, it’s on track to take New York’s spot at No. 3.
  • The value of all goods and services sold in Idaho rose more than twice as fast as the national average last year, but per capita output still ranked among America’s lowest, new federal data show. Idaho’s inflation-adjusted gross state product increased 4.1 percent in 2013, the fifth-highest rate of growth, lagging only North Dakota, Wyoming, West Virginia and Oklahoma, according to a U.S. Bureau of Economic Analysis. The state ranked 50th in the per capita value of real gross state product at $36,000. Growth slowed in the second half of 2013. Fourth-quarter output occurred at a rate of nearly $58 billion a year in 2009 dollars.

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

NORTHERN IDAHO – Benewah, Bonner, Boundary, Kootenai and  Shoshone counties

Regional Developments

  • The Avista Foundation has awarded a $10,000 grant to St. Vincent de Paul North Idaho to help purchase a building from the city of Coeur d’Alene as a one-stop location for 24 different human care services in collaboration with 19 different agencies.
  • Avista has filed its 2014 Natural Gas Integrated Resource Plan with state regulators in Washington, Idaho and Oregon. The plan forecasts sufficient natural gas resources well into the future, indicating access to natural gas supply through the acquisition of additional pipeline resources will not be needed until 2034 or later. The plan is submitted to the public utility commissions every two years as part of Avista’s regulatory commitment.

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Idaho’s Public Colleges Face Challenges – Part Two

Part two of a two-part article.

Part one of this article covered the impact of economic pressures on the changing enrollments at colleges and how to increase the number of high school graduates who will go on to postsecondary education.

Not Ready for College

American high schools are graduating many students who are not prepared for college and consequently, much less likely to complete college than their better-prepared peers or take longer when they do graduate. According to the College Board, which writes and administers the SAT examination used by colleges to access candidates’ readiness for college, about a quarter of Idaho’s high school juniors who took the exam in April 2013 were prepared for college based on their scores in critical reading, mathematics and writing. The ACT, another exam commonly required for college entrance, showed only 26 percent of Idaho students hit benchmarks in all four categories—English, reading, mathematics and science.

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Idaho’s Public Colleges Face Challenges – Part One

Part one of a two-part article.

To compete with other states and globally, Idaho’s economy needs a skilled workforce. Postsecondary education is the key to developing those skills to innovate and thrive. Education also helps raise the quality of life of workers who receive schooling as well as for their families. Recognizing rising skill levels for many jobs and the importance of higher education in making the Idaho economy competitive, the Idaho State Board of Education set an ambitious goal for 60 percent of Idahoans 25 to 34 years old to have a degree or certificate by 2020.

To achieve this goal, Idaho’s public schools must increase student enrollment and retention. But they will be facing some headwinds. Throughout the United States colleges are under economic pressure, and a growing number of private schools are likely to face bankruptcy as pressure mounts as noted in a recent Wall Street Journal article, “Student Drought Hits Smaller Universities,” dated July 25, 2014.

Global competition is intensifying. The United States was the world leader in educational attainment until the 1990s. In recent years, many countries have been producing degree-holders at a higher rate. In 2011, 42 percent of Americans ages 25 to 34 had associate, bachelor’s or advanced degrees, according to the Organization for Economic Cooperation and Development. The U.S. lagged South Korea’s 63 percent, Japan’s 58 percent, Canada’s 56 percent, Ireland’s 48 percent, Britain’s 48 percent, Norway’s 47 percent, Luxembourg’s 46 percent, New Zealand’s 45 percent, Israel’s 44 percent and Austria’s 43 percent. In the United States, the public-private balance of expenditure on postsecondary education is nearly the reverse of the average across other OECD countries. In the U.S., public sources provide 36 percent of spending on higher education while the other nations average 68 percent.

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