This is the second of a three-part series about Idaho’s rural economy. This part evaluates which dynamics influence rural Idaho’s dwindling labor force.
Part one examines elements impacting Idaho’s rural economy today, including population, educational attainment, industries, occupations and wages.
Part three projects how rural Idaho’s population by age group and labor force participation will look in 10 years based on the previous 10-year trends.
A lack of skilled labor is an ongoing struggle for Idaho’s rural economy. Idaho’s rural labor force has not grown since 2010; during the same period, the state’s urban labor force grew by more than 7 percent. The question of labor force is therefore critical to evaluating rural economies. Specifically, it is important to understand what caused stagnation in rural labor forces. In this analysis, we evaluate demographic and economic factors to determine whether rural labor force issues are caused by the usual suspects – aging and economic conditions – or whether there are other, undiagnosed problems. This analysis suggests that rural Idaho’s labor forces have declined for demographic and economic reasons, and not due to cultural or structural factors which are unique to rural economies.
Idaho’s unemployment rate – the ratio of the number of unemployed persons to the total number of participants in a labor market – is often viewed as the go-to measurement of economic health. Yet it can be misleading as the unemployment rate can decline both due to employment growth – unemployed persons finding work – and a decrease in the total labor force – unemployed persons stop looking for work altogether. The former case represents an increase in economic activity, while the latter does not. Continue reading