Recession, Recovery in Northern Idaho Recounted

This is the final article written by Alivia Metts as the Department’s northern-based regional economist. She recently moved on to other career pursuits.

Telling the story about the economy through the lens of a regional economist throughout the economic volatility of the past seven to eight years has had its challenges, but it has been far more exciting and rewarding.

I started at the Idaho Department of Labor during the depths of the recession when employment in northern Idaho dropped significantly. Today, nearly all sectors are firing on all cylinders, wage pressure is starting to ignite and economic activity is rolling.

Recession

The recession really started to take hold in 2008 and became persistent and painful for about two years. Layoffs were occurring in nearly every industry and the number of people holding multiple jobs to make ends meet increased substantially. Jobless individuals were filing for unemployment benefits at an astounding rate. The number of new claims filed in 2009 was nearly 44,000 compared with just over 18,000 in 2007.

The federal government started extending unemployment benefits in 2008, adding 13 additional weeks to the 26 weeks of regular unemployment benefits up to a total of 99 weeks. When the extensions were set to expire on Dec. 31, 2012, northern Idaho residents were disproportionately impacted, representing more than 17 percent of the extended benefit recipients in the state, while the region had only 12.5 percent of total covered employment. Shoshone County had the highest concentration of extended benefit recipients followed by Bonner, Kootenai, Boundary and Benewah counties, respectively, although Benewah County had the third lowest share of recipients in the state; the lowest was maintained by Clark County in eastern Idaho.

Nearly one-quarter of all extended benefit recipients worked in the construction industry. There were 2,443 construction jobs lost through the depths of the recession from a high of 8,025 in 2007 to 5,582 just two years later. The industry continued to drop in employment, losing an additional 1,547 jobs from 2009 to 2012, totaling nearly 4,000 jobs lost from 2007 to 2012. The construction industry, overall, started picking up in 2013, adding jobs for the first time since the recession took hold while building permits jumped 17 percent.

A hole appeared in the economic landscape following the housing bubble, leaving many with little to no work including mill workers and loggers. The number of logging operations was cut nearly in half and what were once productive mill sites became barren tracts of land.

All of the closures that occurred around the region, including Coldwater Creek and JD Lumber, and the departures of Coeur d’Alene Mines, Stimson mill and Jacklin Seed, to name only a few, set off a chain of events like a rock in the river — the water pours over the rock like a pillow but turns into churning chaos on the other side.

These changes not only affect the morale of a community but the overall business climate. Declining housing values reduces property tax dollars spent on schools, public safety, public services and infrastructure projects while demand increases for limited social services. Ultimately, communities see less money circulating in their local economies.

On the other hand, there were very few entities and industries that performed well during the depths of the recession. The Coeur d’Alene Tribe expanded some programs and health care was the only industry that managed to endure the externalities of the whirlwind around them — adding 600 jobs in 2008 and averaging an additional 200 jobs each year after. Every other sector suffered great losses—more than 8,500 net jobs were lost from 2007 to 2012.

Recovery

The recovery moved slowly as it has taken more than five years to bounce back.

The economy started to gain traction in 2013. Nearly every sector saw year-over-year gains for the first time since the recession began. In that one year alone, nearly 2,000 jobs were added to payrolls across northern Idaho. An additional 1,500 jobs were added from 2013 to 2014. Construction and the health care and social assistance industries, together, represented 40 percent of the job growth from 2012 to 2014 — each accounting for 20 percent. Accommodation and food services added nearly 560 jobs, comprising 16 percent of the growth, while manufacturing added nearly 500 jobs in the two-year period, 14 percent of total growth.

The recession has shaped the economy to where it is today. Manufacturers are more diversified in both product as well as type. Health care is moving up in the ranks in its share of employment, rising from 10.2 percent of total employment in the region in 2007 to 12 percent in 2009 and 13.6 percent in 2014. With or without the recession, the aging demographics alone have spurred growth in that sector.

Economic diversification has kept many communities afloat. For example, without health care and the growing aerospace sectors, Bonner County would not have shown such resilience after the major closures of JD Lumber and Coldwater Creek. The departure of Coeur d’Alene Mines would have shown more of a ripple effect if the region’s economic base was not as diverse.

The movement of nonemployers exceeding the growth of employers is yet another testament to the economic diversity this region has been seeing. Nonemployer businesses are predominantly self-employed individuals.