Idaho’s population continues to grow and age faster than the rest of the country, and that has big implications for wages, jobs and the state economy, as Baby Boomers bump up into retirement age and, seemingly, stream into the Gem State.
The latest data from mid-2016 shows that more than half of the nearly 116,000 Idahoans added since the 2010 census are over 65. They represent 52 percent of the total. The 25-44 cohort was the next largest contingent, at a little over 23 percent of the total; 45- to 64-year-olds were 15.6 percent.
At the low end, agewise and otherwise, the under-18 group made up 7 percent of the overall increase, while the 18-to-24 group accounted for less than 2 percent of new residents.
Measuring growth within those brackets, the 65-and-over set again led, their numbers increasing by nearly one-third between the 2010 census and the mid-2016 estimate, from 195,000 to 255,000. That includes a 12.6 percent increase in those 85 or older. The growth rate for 18-and-unders was just below 2 percent, with the 18-to-24 population again smallest, growing at a 1.4 percent rate.
“I don’t think there was anything really that surprising, because it’s just been a trend that way,” said Janell Hyer, an economist and research supervisor with the state Department of Labor, which circulated the new data last week.
In the six years following the 2010 census, Idaho’s overall population grew by 7.4 percent, compared to 4.7 percent for the entire U.S. Idaho’s 31 percent increase in the 65-and-over group during the period compares to about 22 percent for the U.S as a whole. Still, even with the uptick in Idaho’s median age that influx caused, to just over 36 years, that was below the overall U.S. median of just below 38 years.
How does all that affect the economy?
Because more is more: More people, and more demand, means prices for everything in Idaho will creep up, but wages will as well. Idaho has a tight labor market — the state unemployment rate dipped to 3.2 percent in May. Employers, businesses, elected officials and state commerce types are quick to cite the number of jobs that go unfilled now because there aren’t enough skilled workers.
And regarding wages, even if the state continues to hold to the federal minimum wage of $7.25 an hour, low supply and high demand will push it up, a Boise State University economist said.
The influx of new residents — especially in the Treasure Valley, which accounts for two-thirds of the statewide increase since 2010 — will continue to boost demand for services of all kinds, high paid and low paid, said Allen Dalton, a BSU adjunct professor who teaches labor economics.
“The higher wages will attract some of the younger workers that have traditionally gone out of state to stay here,” Dalton said. “I think it’s healthy for the economy.”
He’s seen the evidence: Most of his students, when they graduate, are staying in the Treasure Valley and finding good employment, often with companies that are headquartered out of state (think Microsoft, or Hewlett-Packard). The data bear this out — well, sort of: Those 18-to-24-year-olds might not be multiplying in droves. But their numbers aren’t actually declining, either, defying a perception that they are moving out of state for better opportunities.
And paying minimum wage? Dalton said there’s no way someone will accept that to do the menial part-time watering chores at the RV Park he also runs. He’s paying $10-$11 for that.
“Wages in the Valley for most occupations are well above the minimum wage,” Dalton said.
OK, so that’s wages. What about prices?
Older people who come to Idaho might be drawn by family ties, the climate and scenery, and the relatively low cost of living, but they come with cash at the ready. They’re willing and able to pay a little more to scoop up that house in the Boise Foothills or close by McCall or Ketchum. High Boise home demand and the resulting spike in prices partly bears this out.
The liquidity those newcomers bring with them bears on other sectors of the economy. Since they are typically wealthier, they’ll pay more for food and other products and staples, and they’re used to higher prices where they used to live. Their numbers alone boost demand, so prices will go up, even if more suppliers arrive to meet the need.
From an economist’s point of view, it’s not a bad thing — unless something happens to throw things out of the tidy equilibrium that looks appealing in economics textbooks. More on that below.
So what’s ahead for Idaho’s business sectors?
Heightened demand for services of all kinds — from lawn care to health care, outdoor recreation to home renovation — and Idaho is seeing that already. Health care providers across the board are in higher demand to meet the needs of the aging population, and that will be a persistent trend. Will the health needs of older newcomers overburden rural communities somehow? Probably not, said Dalton: People who relocate to remote areas do so by choice and presumably know what they’re getting themselves into.
For those at entry level or early career stage of the workforce, if Idaho figures out how to meet its goals to improve and expand higher education — not just four-year college, but vocational, technical and two-year programs — that success will answer the shortage of qualified workers that plagues employers now.
So if it’s all to the good, what could mess it up?
Depends on whom you ask. If you’re a longtime resident who doesn’t like the changes, don’t ask an economist. From their perspective, what tends to muddle the orderly balance of supply and demand must often are policy attempts to control it and intervene.
Let’s say a locality, facing an influx of new residents and concerned with the changes that brings, throws up barriers to new construction, for example, or enacts policies to protect existing businesses or industries at the expense of others. That doesn’t stop the underlying growth trend, but it does make the ripple effects of that growth more pronounced, such as by driving costs for housing and goods higher. That in turn more adversely affects those less well-off, longer-term residents who are the intended beneficiaries of those policies.
“There’s always adjustment,” Dalton said. “The question is whether you accept the changes or try to battle the changes. And those battles are typically losing propositions.”
A resident of Boise since 1958, when parts of the Boise Bench were still farmland, Dalton said all the growth has been good for Boise and for Idaho.
“Instead of people thinking about an influx of (newcomers) as a problem, they should be thinking about an influx of diversity and bringing in more opportunities,” he said.