Government Jobs Promote Economic Health in Rural Idaho

One in eight Idahoans who live in a rural area works for the federal, state or local government, not including education.

For some rural communities, government jobs are essential for their economic health and offset increases in low-paying, service-oriented jobs. Many government jobs pay higher average wages and attract a skilled and educated workforce. Additionally, since the vast majority of government wages flow into a community from outside sources, these jobs function as a source of basic income for rural economies, creating wealth inside the community rather than simply recirculating it, as many service jobs do.

Compared with the seven urban counties in Idaho, the share of jobs in government is greater in the rural area of every region except south central Idaho.

When looking at the share of wages flowing into the community from state, federal and local governments, wages in every region except the rural areas of south central and southeastern are greater than the share of government employment. In other words, looking at employment number alone understates the importance of these jobs, but because almost 85 percent of these wages come from state or federal sources, these wages serve as an economic base similar to a mine or paper mill.

Average wagesgraph 1wages by economic activityOver time, the average wage of rural government jobs — adjusted for inflation — is consistently higher than all but the average wage of goods-producing jobs. The average rural government wage is 11 percent higher than the average wage of all jobs and 24 percent higher than a public education job or private service-sector job in a rural area.

Rural ID Employment share graphLike private goods-producing jobs, the share of rural employment in government jobs has been declining since the early 1990s. In fact, the only sector to experience relative growth from 1991 to 2014 was the service sector. The employment share of this sector in rural Idaho grew 14 percent. During that time, the goods-producing share shrank by 10 percent. Government (excluding public education) decreased by 9 percent to 13 percent of rural jobs, and public education dropped 15 percent to 10 percent of rural jobs. While this does not necessarily mean that these sectors are shedding jobs, it does mean that they are growing significantly slower — if at all — than the rapidly-growing service sector.

The growth of employment share and real wages in rural Idaho’s service sector may be driven by increasing demand from a growing population that uses rural areas as bedroom communities and commutes to urban centers. Growing urban areas also translate to more people traveling to rural areas to recreate, helping fuel growth in service jobs that cater to recreation, while growth in rural government jobs lags.

Most government jobs in rural counties are in local government. Only about a third are state or federal government jobs. In the seven urban counties in Idaho, more than 50 percent of government jobs are federal or state, due to the concentration of state and federal offices in urban centers like Boise; however, about half of the urban government jobs are in local government.

rural govt employment

urban government*Butte County is excluded from this analysis because the largest employer, the Idaho National Laboratory, almost exclusively employs workers from urban centers like Idaho Falls and Pocatello., regional economist
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