Idaho’s ‘Micro’ Counties Face Labor Force, Jobs Challenges

Idaho’s “micro” counties, rural counties that have no town with a population greater than 5,000 within their borders, have experienced significant differences in economic growth and development from the state’s urban counties as well as other, larger rural counties.

Rural issues have received significant attention in Idaho. In addition to research conducted within the Idaho Department of Labor, both the Governor’s Office and the Department of Commerce have discussed specific initiatives aimed at fostering economic growth in rural Idaho.

Department of Labor analysts define “rural” as all counties that do not contain an urban center, as noted in previous articles. This definition doesn’t recognize some of the differences in non-urban counties by assuming any county without an urban center is “rural.”  Further narrowing the definition to “micro” counties for the purposes of this analysis avoids this issue by identifying Idaho’s smallest communities and defining their counties as rural.

The following map shows Idaho’s “24 “micro counties” as previously defined, as well as the other counties.

Current Employment

Graph 1 shows the distribution of total employment in the state between the two county groups.  Currently, only 12 percent of all jobs in the state are concentrated in the micro counties.

Unemployment Rate

Over the past 10 years, the unemployment rate in the micro counties has been consistently higher than the rest of Idaho. The gap narrowed during the Great Recession, then widened toward its tail end and the initial recovery period. The rest of Idaho experienced a more rapid decline in the unemployment rate through 2013, when the micro counties began to catch up with the rest of Idaho; that is, the gap got a little smaller. However, the micro counties continue to experience a much higher unemployment rate than the rest of the state. This rate is more in line with the national rate, indicating that the recovery, and Idaho’s recent economic success, has accrued primarily outside of these micro counties.

Employment Growth

The economic success of the rest of Idaho outside the micro counties is really apparent in Graph 3 of employment growth from 2006 to 2016. Leading up to the recession, employment growth was relatively evenly distributed between the two types of counties. Both types of counties gained and then lost jobs at about the same rate. At the beginning of the recovery, though, employment growth began to diverge. In early 2011, both types of counties had lost 3 percent of their jobs since 2006. Over the ensuing five years, the rest of Idaho gained 10.4 percent over 2006 levels, while the micro counties recovered to just 1.8 percent above their 2006 levels. What’s more, the micro counties broke even with 2006 levels in early 2015 and only in 2016 did they reach their prerecession peak. In the rest of Idaho, that peak was eclipsed two years before in early 2014.

Labor Force Growth

The growth of the labor force between the two county types shares a story similar to employment growth. In micro counties, the labor force either remained flat or ticked slowly upward. Though growing slightly more slowly, it mirrors the direction of the rest of Idaho. In 2010, labor force growth in micro counties briefly surpassed the growth in the rest of Idaho, where the labor force momentarily flat lined. But in 2011, like employment growth, labor force growth in the two county types began to diverge. Unlike employment growth, however, the labor force in the micro counties began to shrink. In 2013, the number of people in the micro counties’ labor force dipped below 2006 levels and remained there until 2015, while the rest of Idaho’s labor force continued to grow. The most likely reason for the labor force shrinkage is the aging population in these micro counties. Another reason might be discouraged workers. A final reason might be out-migration of people in the labor force (i.e. workers or job seekers) in exchange for in-migration of people who are not (i.e. retirees). Remember that the labor force is composed of people 16 years old and older who are currently employed or unemployed and looking for work. It does not include people who are not looking for jobs, like retirees, non-working students or people who have given up looking for work.

Micro Counties Labor Force and Employment Growth

Graph 5 shows employment growth and labor force growth for micro counties in the same graph. The important take-away here is the space between the employment growth and labor force growth after 2015. Employment growth from 2006 ended up twice as high as labor force growth. This is indicative of a situation in which there are too many jobs for the number of people in the labor force. Since the number of people unemployed has fallen or leveled off in micro counties since 2011 and jobs have still grown more rapidly than the labor force, it follows that there has been an increase in the number of people who are holding multiple jobs. These jobs, however, are not drawing workers to the area. This is also one reason that many companies are not organically moving into these rural areas. The key is, then, to attract labor to the area. But to do that, a community needs opportunities for good-paying, full-time jobs. The tough part is that people are mobile, and they flow where the jobs and / opportunities are. This is a classic chicken or egg problem of people before jobs, or jobs before people.

Interstates, Ski Resorts and Universities

Perhaps the most obvious feature of micro counties is that they are remote. Of Idaho’s 24 micro counties, only six have an interstate freeway running through them. Of the 20 remaining counties, only nine have no freeway running through them. But of those nine, four are within a few miles of an interstate (Gem, Franklin, Twin Falls and Washington counties) another two have universities (Madison and Latah counties) and a final two – Blaine and Bonner counties – have developed amenities surrounding local ski resorts. Finally, Nez Perce County is home to Idaho’s only port in Lewiston, making it a hub of commerce despite being hours from the nearest freeway. Clearly, access is an important issue in determining population and employment patterns. But this does not spell doom for Idaho’s rural counties. Ski resort counties, for example, have capitalized on natural amenities that surround their communities. Economic developers, government entities and local businesses that recognize these trends will understand their community’s unique comparative advantages. Communicating this uniqueness is essential in a world where people and companies are increasingly mobile.

Bringing economic opportunity via stable, good-paying jobs to micro counties will help residents who want to stay. As Graph 5 shows, it also necessitates attracting and retaining people. Doing so requires investment in infrastructure like good roads, schools, airports and access to medical services. It also includes amenities like a nice main street, good food and entertainment venues and shopping centers. Because private industry is typically more risk averse than government, it is sometimes necessary to coax private investment through initial public investment. This may be the case for many rural communities in Idaho., regional economist
Idaho Department of Labor
(208) 332-3570 ext. 3455