Rich get richer, poor get poorer in Idaho, Treasure Valley

adutton@idahostatesman.comJuly 26, 2013 

There's been a clear shift in the percentage of income pulled in by the richest 20 percent versus the poorest 20 percent over the past two decades.

Idaho and its two largest counties have experienced a redistribution of income over the past couple of decades. The slice of the income pie grew for the richest households and shrank for the poorest.

Data provided to the Idaho Statesman by the U.S. Census Bureau show how income inequality has risen in Ada and Canyon counties since 1989.

The chart below shows the change in the "Gini coefficient," a number representing how far Idaho, the U.S. and Ada and Canyon counties are from statistically perfect income equality. (The closer the line is to 1.0, the larger the difference was between household incomes in that place, that year.)

Census data also tell a story about how income has changed in the past few decades — especially the mid- to late 2000s — for the different income brackets in Idaho.

Comparing 1989 with 2011 shows a clear shift in who earns what.

But looking individually at 2006 through 2011 shows the ups and downs of the boom and the Great Recession, after which top earners pulled in a larger share of their communities' income.

So, what's the reason for this? Steven Peterson, a research economist at the University of Idaho, says it's a culmination of factors:

  • The shift away from a natural-resources and manufacturing economy to a service-based and high-tech economy, where wages are more disparate. For example, the wood products and paper employment in the Lewiston area is now about half of its historic high a decade or two decades ago, he said.
  • Tax policies that make it possible for the very wealthy to keep more of their income.
  • Lower-skilled workers here now compete with those in other, lower-wage countries.
  • Idaho has "been slow to ... really embrace post-high school job training and education," he said. "It's not just the money [to pay for college or vocational courses], it's seeing the need for it among families."

Many of those things are true nationally, not just in Idaho. But Idaho has "been slipping" faster than other states in national rankings for income and wages, he noted.

"It's troubling and puzzling," he said. "You need some inequality for markets to work. But how much is the big question."

Nations with unequal incomes tend to be poorer overall, he said. So if Idaho and the U.S. continue on the same track of the past few decades, they could face a bleak economic future, he said.

 

Audrey Dutton: 377-6448, @IDS_Audrey

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