Tag Archives: Craig Shaul

Explainer on the Unemployment Insurance Trust Fund and Taxes

Episode 3 – Trust Fund and Taxes:

For the third installment on Idaho’s unemployment insurance (UI) program, we explain the UI Trust Fund and its influence on the taxes employers pay.

The Trust Fund:

The UI Trust Fund is the center of the UI program.

The most basic function of the UI Trust Fund is as the pool where UI taxes Idaho employers pay are deposited and from which benefits paid to claimants are withdrawn. The diagram of figure 1 compares it with a holding tank shaped like Idaho. As the amount of funds in the tank goes up or down, it determines the tax rates on employers.

Trust Fund Graphics

All 50 states, Washington, D.C. Puerto Rico and Virgin Islands have a UI Trust Fund. The Federal Unemployment Tax Act (FUTA) requires the UI trust funds be kept with the Unemployment Trust Fund at the U.S. Treasury, and the funds can only be used to pay unemployment benefits.

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Idaho’s Unemployment Insurance Program Part of a National System

Idaho’s unemployment insurance (UI) program purpose is to replace a portion of an individual’s wages on a temporary basis when they lose a job due to no fault of their own. While the purpose is simple, it is a complicated machine subject to misconceptions.

This is the first installment in a series about Idaho’s unemployment insurance program and how it fits within the national system. The series will perhaps dispel some misunderstandings about the UI program as well.

Idaho’s UI program is one of 53 in the U.S. system that includes every state, Washington, D.C., Puerto Rico and the Virgin Islands (U.S. Department of Labor: Employment & Training Administration, 2021). All programs share certain characteristics that are foundational to their creation in 1935 (Price, 1985).

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Dearth of Skilled Workers Continues to Plague Employers

Despite the amount of unemployment created by the pandemic, the scarcity of skilled workers is growing more intense. Some industries have suffered more than others, however for people who are unemployed or pondering a transition to a skilled job with more security and higher pay – or need funding support for training – it’s a job seeker’s market.

A Divergence of Industries

Idaho and the nation were experiencing one of the longest periods of expansion in history prior to 2020. Finding skilled workers available to fill jobs had been a challenge for several years. Demographics and population growth limited the number of new people available to work. Hot industries were caught between increasing demand for services from the growing economy, and not having enough available workers to fill positions for skilled or unskilled workers. Government labor and training agencies were busy using pipeline training programs and apprenticeships to connect employers with workers.

In addition to the tragic loss of life, the economic disruption caused in the United States by Covid-19 has not been the same for each industry. The large number of job losses during 2020 were most concentrated in hospitality and consumer services – industries the pandemic impacted the most. Occupations most affected by layoffs tended to pay lower-than-average wages, resulting in the emergence of what some economists have dubbed the K-Shaped Recession. Figure 1 attempts to demonstrate this divergence of experience by lining out national wage experience into three categories or terciles.

Workers earning less than $16 per hour have endured more unemployment during the pandemic than occupations paying more $16 or more.

Figure 1: U.S. Job Losses by Wage Tercile

Source: Economic Policy Institute

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Idaho Population Shift from Rural to Urban Counties Continued in 2018

In-Migration Accounted for 73 Percent of Idaho’s Population Increase

Idaho’s population continued to become more urbanized from mid-2017 to mid-2018, with nearly 73 percent of the growth coming from outside the state, newly released data from the U.S. Census Bureau shows. The data provides additional detail at the county level to the January release that showed Idaho’s 2.1 percent population increase tied with Nevada as the fastest-growing state in the nation.

The Boise Metropolitan Statistical Area (MSA) population grew by 2.9 percent – the eighth fastest among the nation’s 383 other MSAs. The five counties that comprise the Boise MSA – Ada, Boise, Canyon, Gem and Owyhee counties – increased by 20,346 people accounting for 58 percent of the state’s total increase of 35,304. The concentration of more than half of Idaho’s growth in the Boise MSA typifies the continued steady shift toward urbanization of the state’s population from rural to urban counties.

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Idaho Population’s Growth Rate Tied for Fastest in Nation

Idaho’s population totaled 1.75 million as of July 2018, growing at a rate of 2.1 percent from July 2017 and tying with Nevada for the fastest growth rate in the nation.

Utah with 1.9 percent was third. Wyoming declined by 1 percent to 579,300 – one of five states to see a decline during this time.

The national average growth rate was 0.6 percent.

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Demystifying Idaho’s Unemployment Rate

Idaho’s seasonally-adjusted unemployment rate was 2.6 percent for November 2018, the most recent data available. This is the 15th consecutive month that Idaho’s rate has been at or below the low rate of 3 percent. But what does 3 percent employment mean? Three percent of what?

The answer to what the unemployment rate means and how it’s determined is best understood within the context of the numbers that are also reported with it each month. The unemployment rate is a figure that measures the unemployed segment of the labor force, which is itself a subgroup of the civilian population and one of a few terms that describe different states of people in the population and their relationship with work and the economy.

The major subgroups of the larger civilian population include the labor force, employed and unemployed. The relationship among these various groups provide the basic measures of the participation rate and unemployment rate.

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Idaho Population Changes: Where are People Coming From and Going To?

Population Growth – Idaho Tops Nation

Last December, the U.S. Census Bureau reported Idaho’s population totaled 1.72 million, and grew at a rate of 2.2 percent from mid-2016 to mid-2017. This was the fastest growth rate in the nation and three times faster than the national average of 0.7 percent. Of Idaho’s neighboring states, Nevada was second with 2.0 percent growth and Utah, with 1.9 percent, was third. Wyoming’s population declined by 1 percent to 579,300 – one of just five states to see a decline during this time.

The Census Bureau’s components of change only reveal broad categories of Idaho’s population growth – natural increase and net-migration.  Of the 36,917 new residents to Idaho, only 28 percent was the result of natural increase – births minus deaths – while 72 percent was from in-migration, primarily domestic.

Idaho’s Total In-Migration

So where are these people coming from who are moving to Idaho? The 2016 American Community Survey state-to-state migration tables, the most recent data available, can provide some answers. According to the Census Bureau, about 80,000 people were new residents to Idaho in 2016. Of those, 17,000, or about 21 percent, were from California – the largest single source of new Idaho residents, followed by Washington at 9,300.  Almost 8,500 of new Idaho residents came from a foreign country, the third largest source of in-migration, representing 9.5 percent of the total. Eight of the top 10 sources of in-migration were western states. Continue reading →

Automation’s Role in Idaho’s Future Workforce

It seems there is almost a daily story on the effect robots and automation will have on the current labor force. Autonomous, self-driving cars and trucks, robot mops and automated pizza delivery vans are at the horizon’s edge of a future economy that promises to redefine the interplay between humans and machines in the production of work.

Estimates indicate 47 percent of current employment in the United States has the potential to be automated in the next 10 to 20 years based on current technology trends. However, potential risk is not the same thing as inevitable replacement, and research shows that while some jobs will likely be fully automated, most will be redefined as automated systems and robots are introduced into the economy. Continue reading →

Around Idaho: June 2016 Economic Activity

Information provided in this article is from professional sources, news releases, weekly and daily newspapers, television and other media.

Northern Idaho
North Central Idaho
Southwestern Idaho
South Central Idaho
Southeastern
Eastern Idaho

NORTHERN IDAHO – Benewah, Bonner, Boundary, Kootenai & Shoshone counties

Bonner County

  • Bonner County has agreed to grant Quest Aircraft a package of tax exemptions in recognition of the company’s expansion plans. The exemptions come under a provision in Idaho code which allow a company to declare all or partial market value as tax exempt provided the company spends a minimum of $3 million on business improvements over a five year period. Source: Bonner County Daily Bee

Kootenai County

  • Several new restaurants and retail stores opened in Kootenai County, mostly in the northern and western areas around new housing developments. The Prairie Shopping Center in northern Coeur d’Alene continues to grow. Coeur d’Alene is running out of space against the lake and river in the south, which increasingly sent new business establishments and housing developments northward. Source: Coeur d’Alene Press
  • A Montana-based builder has announced plans to construct a new three-story, 52-unit apartment building in downtown Coeur d’Alene. Glenn Construction Co., confirmed it has purchased land and is currently working with the city to approve a design that will accentuate Coeur d’Alene’s downtown aesthetics. Source: Coeur d’Alene Press
  • Coeur d’Alene is in the process of a major downtown public works project which includes overhauling parking lots, city streets and pedestrian corridors around City Park and the lakefront. The goal is to better facilitate the large crowds that descend on the area for events like Ironman Triathlon and Independence Day. Source: Spokesman Review
  • Kootenai County’s Fairgrounds and Airport hosted a large training exercise which included state and local law enforcement and emergency services from Idaho and Washington, as well as federal agencies. The exercise was designed to test preparedness to respond to a major earthquake event along the Cascadia fault line. In such an earthquake scenario, northern Idaho would be expected to be a key evacuation point for Washington and Oregon residents on the Pacific Coast. Source: Spokesman Review

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Job Growth Anticipated in Long-Term Employment Projections

By the year 2024, the national economy is projected to add 9.8 million jobs, health care and social assistance will have the most jobs and labor force participation will drop as the last of the baby boomers retire.

These projections are part of the long-term employment and occupation projections for the nation released by the U.S. Bureau of Labor Statistics every two years. Projections attempt to answer the question, “What will the economy look like a decade from now, if it were to be running at full capacity?” This information is provided for long-term planning for decision makers and for those planning their career options. Continue reading →