Economist says Idaho is one of fastest growing states as more people flood into urban centers.
While the rest of the country’s job growth rate has been slowing down, Idaho’s has been accelerating since the population consistently remains the first or second fastest growing in the nation, said Sam Wolkenhauer, Idaho Department of Labor regional economist for northern Idaho.
Wolkenhauer addressed roughly 50 people at the Idaho Economic Development Association Fall Summit Thursday at the University of Idaho Pitman Center in Moscow.
Wolkenhauer said Idaho is typically competing with Utah for the fastest-growing state supremacy.
Starting in 2014, Idaho’s job growth rate has been increasing, rising from about 2 percent per year to about 3.5 percent more recently, he said.
Retirement-aged people – or those 65 and older – in urban areas make up the vast majority of Idaho’s population growth from 2000 to 2015, Wolkenhauer said.
He said Idaho’s urban areas have seen 77 percent population growth among those 65 and older, a 32 percent increase of people aged 15 to 64 and a 31 percent spike in those 14 and younger.
In rural Idaho, the youth population is slightly shrinking and has been for a long time, Wolkenhauer said. He said the working age is only growing 5 percent in rural areas since 2000.
“When we’re talking about population growth in Idaho, not only is it concentrated in urban areas, but the growth of the working population is especially concentrated in urban areas,” Wolkenhauer said.
He said Idaho is becoming increasingly urbanized at an extremely fast rate, but it is still a relatively rural state compared to the rest of the country.
Wolkenhauer said the Gem State ranked 42nd in urbanicity, and he expects the state to be 30th or 31st by 2026.
The U.S. has been adding 2 to 3 million jobs each year the past eight years, which is a phenomenal period of growth, Wolkenhauer said.
“This has been one of the longest expansionary periods that the country has enjoyed ever,” he said.
Wolkenhauer said economists have to go back to the World War II-driven manufacturing boom to find a period of job growth that was this long, sustained and successful.
The growth will slow down in the near future, however, Wolkenhauer said, and economists have already seen the growth decelerate. The primary reason for the deceleration is there are not many people left to hire, he said.
Wolkenhauer also discussed the nation’s declining labor force participation – or the percentage of eligible workers working or seeking work – especially the roughly 20 million working-aged men missing from the labor force.
“What’s particularly troubling is the decline has been primarily in prime age workers (25 to 54), who are the people that we should expect to be working at the highest rates,” Wolkenhauer said.
He said the percentage of young men working has dropped from 73 percent in 1985 to 57 percent in 2015. Young women are also working less as 64 percent worked in 1985 and 54 percent worked in 2015. Both the decreases are a result of younger people enrolling in higher education, Wolkenhauer said.
This is fascinating. Normally, kids go to college or graduate school when the economy has a downturn, not when it’s in a boom.
“This represents a very important change in behavior, a change in lifestyle, but they’re not economically non-productive,” Wolkenhauer said.
He said those dropping out of the labor force are almost exclusively men between the ages of 25 to 54. Since 1950, the labor force participation rate for men has dropped 18 percent compared to a 24 percent increase for women.
“On the one hand, it’s very good that women are working in higher numbers,” Wolkenhauer said. “But on the other hand, it’s also bad that men are missing from the labor force.”
The decrease in working men is especially significant as millions of Baby Boomers are retiring or nearing retirement, he said.
Wolkenhauer said economists are working to learn why so many working-aged men are leaving the workforce.
Follow the money. They are paid not to work. If they weren’t paid not to work, they would work.
“In my opinion, it’s probably the main question we need to answer going forward to resolve our long-term economic future,” Wolkenhauer said.
Although Idaho’s unemployment is historically low – hovering below 3 percent for several months – and the economy is healthy, wages are not rising to the degree economists expect, leaving them puzzled, Wolkenhauer said.
He said recent data suggests wages may finally rise as economists have expected.
Idaho Department of Commerce Director Bobbi-Jo Meuleman said Idaho’s traditional industries, such as agriculture, continue to grow. In turn, the growth is helping bring in higher-paying jobs, including food manufacturing, agricultural support and computer electronics.
Other emerging industries in Idaho include appliance and component manufacturing, information services, beverage manufacturing, data processing and advanced manufacturing.
Meuleman said the most common challenges facing Idaho communities are a lack of labor, broadband and affordable housing – all issues the IDC is working to resolve.