Monthly Archives: January 2014

Economic Activity in Idaho in January

Here is a roundup of economic news compiled by the Idaho Department of Labor in January:

NORTHERN IDAHO

Benewah, Bonner, Boundary, Kootenai & Shoshone counties

Regional  Developments
  • North Idaho College was awarded a three-year $100,000 grant from Avista Utilities to offer an Integrated Business Entrepreneurship program. Students will learn how to evaluate their business concepts and start their own businesses. The program will also give them the background to evaluate whether they should buy specific businesses. After students earn their certificates, they will be eligible for business loans of up to $15,000 through the Avista Micro-Enterprise Loan Fund.
  • A $900,000 federal grant from the U.S. Department of Health and Human Services will expand the number of medical residents in Spokane and help create a medical training clinic in Spokane’s University District. The federal funding will extend the program into its second year so that in 2015 there will be money supporting 12 residents for the clinic. There is a possible third year of funding if the program is successful.

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Idaho Agricultural Employment Maintains Growth Despite Recession

farm gdp

Agriculture is important to Idaho’s economy. But it’s not all potatoes. In 2011, crop and animal production generated nearly $1.8 billion, or 3.5 percent of the state’s real gross domestic product.

But most of the Bureau of Labor Statistics employment figures exclude agricultural jobs. The seasonal nature of the work, lack of coverage for unemployment benefits and addition of nonpaid family workers are some of the reasons.

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Labor Participation Rates in Idaho, Nation Slip

Laborforce participation

In 2013 both the national and statewide unemployment rates were declining – a positive economic sign. But the concern has been the labor force participation rate, which has been falling – particularly in certain age groups.

The labor force participation rate – the percentage of the adult population that is employed or actively looking for work – has been steadily declining since the late 1990s, both nationally and in Idaho. Idaho did see a strong jump in the rate during the mid-2000s expansion, and the state participation rate has remained at or above the national rate even during five percentage point slide over the past 15 years. The national annual average rate only declined 3.4 percentage points.

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Technology: What Jobs Will it Eliminate? What Jobs Will it Create?

Concerns are growing that robots and other new technologies will eliminate more jobs than they create. Which occupations are likely to disappear? What kinds of jobs are being displaced?  What kind of jobs are being created? Which will thrive?

Robots in the workplace, smart machines, the Internet and other technologies have changed or eliminated thousands of jobs in the past decade.

While robots have been in large factories for many years, they now show up in small manufacturers, distribution centers and a host of other places. Automation is transforming banking, the back offices of corporations, airlines, call centers and retail. Secretaries are being replaced by word processors and accountants by QuickBooks. Online retailing has led to fewer jobs at shopping malls across the nation. The Internet wiped out thousands of jobs at travel agencies, and now self-service kiosks are replacing counters where airline clerks previously assisted customers. Utilities no longer hire people to read meters. New digital meters collect information without human help, generate more accurate power bills and send an alert if the power goes out.

Self-service has reached new levels in the last few years with the growth of the Web, the proliferation of computerized kiosks, better kiosk interfaces, voice recognition and mobile phones. Today millions of people manage their finances, refinance their homes, make their own travel itineraries, book their flights and hotels, track packages and buy tickets from their computers. Self-service appeals to companies because it saves money. The customer does the work once done by a paid employee. Customers like self-service because it is convenient and fast, gives them control and accommodates their schedules. Another factor speeding the proliferation of self-service is a new generation of customers, who are more comfortable using computers, keyboards and screens.

Technology is even taking some work from doctors and lawyers. Robots are being used to perform some surgeries, reducing the number of complications by 80 percent and allowing shorter hospitalizations. Specialized software is being used to review legal documents in a fraction of the time it took an army of lawyers and paralegals.

In a Wall Street Journal article in January 2012, W. Brian Arthur, an economist at Xerox Corp.’s Palo Alto Research Center, said, “It’s not just machines replacing people, though there’s some of that. It’s much more the digitization of the whole economy.”

A steep decline in the cost of computing since the 1970s provides huge incentives for employers to substitute increasingly cheap and capable computers for more expensive labor. During the recession, automation allowed many businesses to cut jobs and still maintain the same level of production. Hardware and software prices have dropped enough to make them more affordable to small firms. At the same time, smart machines have gotten smarter, their user interfaces have become much simpler and people are more comfortable using them.

The Web, artificial intelligence, big data and other technologies made possible by the ever-falling costs of computing and storage capacity are automating many routine tasks. Increasingly, digital processes are “talking” to other digital processes, enabling businesses to do more with fewer people.

Kathryn Tacke, regional economist
Kathryn.Tacke@labor.idaho.gov,  208-799-5000 ext. 3984

Coming next week: How will robots and other technology change the workforce?

FAQ Friday – Why did you change the way we file for unemployment insurance benefits?

Why am I being sent to a phone when I go to my local office for answers to my unemployment insurance questions?

Getting answers to your unemployment insurance questions over the telephone means consistent answers from someone who specializes in unemployment program benefits. It also frees up our local office staff so they can concentrate on helping the unemployed become job seekers and connecting them with employers.

Unfortunately this change is also resulting in high call volumes during our busy times. If you find yourself on hold for more than 30 minutes, you will be asked to leave a voicemail message. Please be assured your voicemail message will be returned. If you are concerned about cellphone minutes or long distance charges, feel free to use a phone in any of our 25 local offices or email us at www@labor.idaho.gov.

I used to be able to not have to look for work during a seasonal layoff because I planned to go back to work for the same employer. What happened?
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Are You Ready for a Career Change?

You don’t have to be in a dead-end job to feel that you’re in a career sleeper-hold.  Do you show any of these signs of being in a career rut?

  • Are you losing skills (for example writing, speaking to groups or using math) because you don’t use them on the job?
  • Have you lost ambition or motivation because there doesn’t seem to be an outlet for it?
  • Do you have great ideas but are not in a position to implement, or even communicate them?
  • Could you do your job blindfolded with one hand tied behind your back?

close up woman at copier

If your career progress is veering off course, or going nowhere at all, it may be time to review your career vision and examine your options.
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Ending Emergency Benefits and the Impact on Idaho’s Unemployment Rate

Will ending emergency unemployment compensation impact Idaho’s unemployment rate?

Extended benefits for about 2,500 Idahoans ended Dec. 31. And while there will be a measureable impact on Idaho’s economy of 2,500 claimants losing extended benefits – around $600,000 a week – it will have little impact on the state’s official unemployment rate, which measures people actively looking for work, or the rate that includes people who are discouraged or working only part time because they cannot find full-time jobs.

Whether someone is receiving benefits or even eligible for benefits is not a consideration when calculating Idaho’s or the national unemployment rate, which is based on public responses to the monthly Current Population Survey. People receiving extended benefits are already included in both measures and will continue to be factored in as unemployed, as long as they continue actively seeking work.

Where the expiration of benefits could indirectly impact the rate are discouraged and involuntary part-time workers – if enough claimants change their job search behavior now that extended benefits have ended. For example:

People receiving extended benefits are included in the basic unemployment rate and a broader rate that includes discouraged and involuntary part-time workers. If these people are receiving extended benefits, they are presumably unemployed, available for work and actively seeking work – criteria to be considered as unemployed and necessary for collecting benefits. These people will remain in these measures if they continue to look for work now that extended benefits have expired.

If a job seeker stops looking for work once extended benefits expire because they believe there are no jobs available even if they want to work, that individual is still included in the broader measure of unemployment as a discouraged worker. If they are available to work but not currently looking for work for reasons beyond discouragement, they are considered as a marginally attached worker and is still included in that broader measure. In both instances, the basic unemployment rate could decline.

If extended benefits have expired and the job seeker can only find a part-time job despite wanting full-time work, they are considered as working  “part time for economic reasons,” or involuntarily part time, and still included in the broader measure of unemployment.

If a person stops looking for work and no longer wants to work once unemployment benefits expire, they are considered to have left the labor force and are not included in any unemployment rate calculation. This group includes retirees, students and homemakers. Their departure from the labor force could reduce both the basic and broader unemployment rates.

Bob Uhlenkott, chief research officer
Bob.Uhlenkott@labor.idaho.gov

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Regional economist Will Jenson recently explained the various levels of unemployment, who gets counted and what these various rates mean in a recent Idaho Employment article called Alternative Measures of the Unemployment Rate.