This is the first of a three-part series about Idaho’s rural economy. This part examines elements impacting Idaho’s rural economy today, including population, educational attainment, industries, occupations and wages.

Part two evaluates which dynamics influence rural Idaho’s dwindling labor force.

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.

—-

Labor force is a key ingredient for economic success, and labor force statistics help measure how successfully the economy is performing. The demographics of Idaho’s labor force differ in fundamental ways between its seven urban counties — Ada, Bannock, Bonneville, Canyon, Kootenai, Nez Perce and Twin Falls – and 37 rural counties. These differences spell out the challenge of economic growth and development in rural areas

Older Population

The labor force in Idaho’s rural counties reflect the intensity of their aging population. The change of baby boomers from their 40s and 50s in 1995 to their 50s and 60s has resulted in a decrease in the workforce 35 to 44 years of age and a big increase in the number of people 55 and over, as the chart of workers on payrolls shows in Fig. 1. In addition, labor force participation rates for people 55 and older have risen over the past 30 years as more have enjoyed longer lifespans and better health.

In the U.S., the average retirement age rose from age 62 in 1995 to 65 in 2015.

The decline in the under-24 age group has been steeper in rural than urban counties. This makes the education and training of young people of even more concern as youth become a more precious resource for replacing older workers nearing retirement in rural areas. The Idaho Department of Labor’s apprenticeship initiative, which aims to increase the use of work-based learning opportunities in vital industries, will be one way of helping rural counties prepare their youth for good jobs in their communities.

Education Differences

Idaho’s rural workforce is less educated than its urban workforce. In Idaho, rural youth are about as likely to graduate from high school as urban youth, but many leave the community as soon as they graduate. As a result, about 87 percent of the population 25 to 34 years of age in rural counties have high school diplomas or have earned an equivalency, while in urban counties that figure rises to 91.6 percent.

As Fig. 2 shows, a much smaller proportion of the adult population in rural counties has college educations. Fig. 3 looks at the percentage of the “working age population,” – people 25 to 64 years old – who have graduated with four-year degrees.

Idaho’s rural counties are divided into two groups — high density (population of 30 persons or more per square mile) and low density (fewer than 30 persons per square mile). High density rural counties are: Madison, 81.1 persons per square mile; Payette, 56.1; Jerome, 38.0; and Latah, 36.0. The state’s population density is 20.0, while the nation’s population density is 90.9. Three of Idaho’s counties have population densities greater than the nation’s: Adam 411.6; Canyon, 351.7; and Kootenai, 120.8. The high-density rural counties include two counties where the demographics reflect the students and faculty at BYU-Idaho (Madison) and the University of Idaho (Latah). Consequently, the low-density rural counties have much lower education levels than the high-density counties.

Educational attainment is closely linked to labor market outcomes. In general, those with college degrees receive higher earnings and are less likely to be unemployed.

More Concentrated in Traditional Industries

Workers in rural counties are more likely to be employed in Idaho’s traditional mainstay industries. Natural resources, including farming, forestry and mining, provide 9.9 percent of the payroll jobs in rural counties and only 1.7 percent in urban counties. The fast-growing health care and social assistance sector plays a smaller role in Idaho’s rural counties, making up 10.7 percent of payroll jobs; in urban counties, 15.8 percent. Professional and business services – including law offices, architecture and engineering firms, management consultants, computer consultants, scientific research, call centers and temporary help agencies — make up 9.3 percent of jobs in rural counties and 12.6 percent in urban.

Their greater reliance on traditional mainstays and lower percentage of high-tech industries makes Idaho’s rural counties more vulnerable to shocks caused by economic restructuring and less likely to grow rapidly.

Less Sophisticated Occupations

Industrial data classifies employer establishments based on their primary products or services, while occupational data focuses on the tasks, responsibilities and skills of individuals. As with industries, there tends to be less variety and proportionately fewer high-skill occupations in rural counties compared with urban counties. As Fig. 6 shows, the rural counties have proportionately fewer jobs in high-paying, high-skill occupations such as business operations, financial, computer, engineering, science, legal, and health diagnosis and technical. Farming, fishing and forestry occupations account for 5.3 percent of the employed labor force in the rural counties, compared with 1.4 percent in the urban counties.

More Likely to Work in Smaller Firms

Not surprisingly, the rural workforce generally works at smaller firms.

More Entrepreneurial

Idaho’s rural workforce has a higher percentage of self-employed members. Some of that reflects the greater proportion of farmers located in the rural counties. In addition, many rural residents may become self-employed as a last resort. Faced with more limited job opportunities, they may choose to start their own businesses.

More likely to be unemployed

Over the past 35 years, Idaho’s rural counties have suffered from higher unemployment than the urban counties. Shocks to mainstay industries were responsible for some of the higher rates. In addition, many rural counties have large periods of unemployment ever year. That seasonal unemployment brings up the average unemployment rate for the year.

Slightly more male

A higher proportion of the workers on payrolls in Idaho’s rural counties are male. This partly reflects the greater proportion of traditionally male-dominated industries in rural counties — farming, forestry, logging, construction, transportation and manufacturing. It also may reflect a greater emphasis on traditional gender roles in some rural communities.

Lower paid

Rural residents tend to earn less than urban residents, partly because of the differences in industrial and occupational makeup and partly because of a slightly lower cost of living.

The gap between rural and urban pay has narrowed over the last 20 years. The average pay of payroll workers in Idaho’s rural counties, when adjusted for inflation and expressed in 2015 dollars, grew 13.8 percent, from $31,614 in 1995 to $35,982 in 2015, while urban pay grew 5.6 percent from $37,424 to $39,502.

Urban-rural earnings differences are greater at higher levels of education. Many young adults leave rural areas to attend college, and many remain in urban areas after college because of the higher earnings available to them in those areas.

 More diverse

Hispanics make up 12.6 percent of rural Idaho’s labor force, while they make up 9.9 percent of Idaho’s urban labor force. Southern Idaho counties, where agriculture plays a major role, have the highest shares of Hispanics. They include: Clark (41 percent of the labor force); Minidoka (32 percent); Jerome (31 percent); Lincoln (30 percent); Power (30 percent); Gooding (27 percent); Owyhee (26 percent); Cassia (24 percent); Washington (21 percent); Blaine (19 percent); Teton (17 percent); Bingham (17 percent); and Payette (15 percent).

Slightly less likely to participate in the labor force

Labor force participation rates in Idaho’s rural counties are marginally lower than in urban counties.

Still struggling with the legacy of the recession

 Idaho’s rural counties still are suffering from the job losses caused by the severe recession that began in December 2007. While payroll employment in Idaho’s urban counties in 2015 was 1.4 percent higher than in 2007, payroll employment in the rural counties was 1.3 percent lower – about 6,400 jobs lower.

The Challenge

 Many of Idaho’s rural counties have landed in a Catch-22. With fewer young adults in their communities, their populations are likely to dwindle over time. They’ll find it difficult to recruit new businesses to their communities if they don’t have large enough workforces with a variety of skills. But they can’t keep youth who grew up there and attract other working-age adults unless they can offer higher-paying jobs. If communities can’t break that impasse, they will end up with declining populations, especially youth populations. Many rural communities are already challenged with replacing workers as they retire and finding enough volunteers for community emergency services and local government such as city councils.

With the numbers of young workers declining in many communities, the education and training of youth becomes even more important. Scarcity makes youth an even more precious resource. The future of communities depends on their young people being prepared to take over from the large numbers of baby boomers as they retire from work and from volunteer positions. Remoteness from universities, colleges and professional-technical programs makes it more difficult for rural residents to receive education and training. That makes it even more important for rural school districts to offer meaningful professional-technical programs. But many rural districts are struggling with reduced funding as their enrollments have declined.

Over the past 15 years or so, outreach programs by colleges and the growth of Internet-based college courses have helped rural residents fill some education and training gap. Lack of access to fast broadband in many rural communities makes some of the Internet-based training less useful than it could be.

Kathryn.Tacke@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 799-5000 ext. 3984