Border Cities Affected by Minimum Wage Differences

Where and how far workers are willing to travel to their jobs depends on many factors. In border cities between states with different minimum wage levels, commuting patterns tell much of the story.side bar for jan's aritcle

For private enterprise, the minimum wage can be a tool to ensure a sufficient local labor pool if it’s higher than the state next door. Living in a border city  provides opportunities for residents to access better paying jobs in a state with a higher minimum wage, while taking advantage of lower living costs in the neighboring state.

Commuting patterns can be analyzed using Census Bureau data. Idaho’s western border sees significant movement between labor markets with Washington and Oregon. Although Montana, Nevada, Wyoming and Utah are contiguous to Idaho, there are no major industry sites on those borders.

In the case of the minimum wage, Idaho and Utah are the only states among the seven with minimum wages at the federal level – $7.25 an hour. The others are among the 29 states with higher minimum wages.

Washington State

Washington’s minimum wage rose to $9.47 an hour in 2015. Since 2001 it has been adjusted annually based on the Consumer Price Index. Minimum wage workers from Kootenai County and Nez Perce County are attracted by this wage differential of $2.22 hourly or $4,600 annually for full-time workers. This can impact workers higher on the wage chain as well. When an employer structures the wage differentials to reflect differing skill levels or longevity, a boost to workers on the lower end of the scale due to public policy ratchets up the other wage categories.

Kootenai County, Idaho

Coeur d’Alene is 45 minutes from Spokane, and is a Washington metropolitan hub. Job density is show in blue on Figure 1 with a fairly solid corridor between the two areas. Spokane County’s employers attract an estimated 7,500 workers who reside in Kootenai County. Of the 15,600 workers, both part- and full-time, leaving Kootenai County to work elsewhere, 8,800 hold down jobs in Washington State — well over 50 percent. That is a larger share of the labor pool than those working in other parts of Idaho, estimated at 6,300 workers.KootenaiCountyCommuteWorkers commuting from outside the county are partially offset by the incoming 14,200 who hail from other areas of Idaho, nearby states and even a sprinkling from across the nation. This data – from the U.S. Census Bureau’s Longitudinal Employment Data program – includes students attending North Idaho College who could be linked to their family’s home address for tax reporting purposes, but only if they are working while attending school.

KootenaiWorkers_ArrowsKootenaiWorkers_where do the work

Nez Perce County, Idaho

Lewiston, Idaho and Clarkston, Washington, are symbiotic communities, joined by the bridge spanning the Snake River. Much of the commerce and industry occurs around the waterways and the eastern-most freshwater Port of Lewiston located at the confluence of the Clearwater and Snake rivers, making the interrelationship between the two communities significant. Lewiston differs from Coeur d’Alene in that many jobs are clustered around the plants and the port located primarily in Idaho. Idaho’s lower minimum wage sets the base wage lower in Idaho than in Washington, making it more likely these factories will remain in Idaho and potentially expand and new businesses relocate.

Around 3,100 net commuters into Nez Perce County are from outside the county, once again from Idaho, Washington and around the nation with students attending Lewis & Clark State College. Meanwhile Asotin County, Washington, has an estimated 3,300 workers leave its county for work in Lewiston. The population base continues to be in Lewiston. Full-time manufacturing industry jobs with benefits making paper, ammunition and jet boats, as well as jobs at the port, trump the industry base in Clarkston and the city of Asotin. The Census Bureau estimates 1,790 retail trade jobs in Nez Perce County compared with 1,071 retail trade jobs in Asotin County. Manufacturing has more than double the jobs in Nez Perce County versus Asotin County. Workers gravitate toward the jobs and are willing to commute when they are satisfied with where they live.

table_Job counts by placesNez PerceiWorkers_Arrows Asotin County_Arrows

Oregon State

Oregon’s minimum wage ratcheted up this year to $9.25 an hour. The state adopted annual inflation adjustments in 2004, similar to Washington’s policy. The Snake River forms the border between Oregon and Idaho in some areas, and the two are joined by a bridge that links Ontario, Oregon, with Fruitland and Payette in Idaho. Many smaller Idaho communities are within 15 minutes of the border. There are three times more workers traveling to Malheur County, Oregon, from Idaho’s western counties than the reverse. Idahoans filled approximately one out of every four jobs in Malheur County in 2011, according to the most recent Census data.

MalheuriWorkers_ArrowsOther Border States

Idaho’s southern and eastern borders and the cities nearby share labor pools with other states, but the movement is not as fluid as with Washington and Oregon. For example, south central Idaho workers commute to Jackpot, Nevada, or to mines near Elko, Nevada. During 2011, 327 Twin Falls residents  – a negligible portion of Elko’s total workforce at 1.3 percent – worked in Elko County during the week and commuted back to Twin Falls for weekend. Commuting does provide options for workers who want a different environment for employment. The Nevada mines offer high-paying jobs for welders that often cannot be beat in Idaho.WorkersLive_ElkoCounty

Some commuting losses could be reversed. The volume of workers tempted to change jobs can be misleading since some invest time and effort in developing their careers. Changing jobs to save time and fuel does not always make sense based on workers’ ages and tenure, industry concentration, educational attainment and wages. Moving up a career ladder frequently requires a different focus in skills necessitating training. Retooling can be a form of workforce development, but not every worker wants the change and the stress involved with remaking oneself. Many workers are willing to settle for the status quo.

 Source: “Who Makes Minimum Wage?” FactTank, News in the Numbers, by Drew DeSilver, Pew Research Center, September 8, 2014.

Jan.Roeser@labor.idaho.gov, regional economist
(208) 735-2500 ext 3639