Idaho’s Non-Farm Employment Rises, But Farmers Feel Pinch Cutbacks In Government Funding May Curtail Public-Sector Hiring

Idaho’s cooling economic expansion is being felt across the state but not by its hundreds of thousands of non-farm workers.

In fact, in the Batt administration’s new economic forecast, analysts paint an even brighter economic picture for workers than they did just three months ago.

Increased wages and better job prospects in the higher-paying goods-producing sector highlight the outlook.

But if the overall economy is slowing down - and there is no doubt among economists that it is - the impact has to be felt by somebody, and that appears to be farmers and those relying on government checks - both payroll and assistance.

Experts said producers made significantly less money last year than they had originally thought - $300 million less than the originally estimated record income of over $1 billion because of depressed prices for both cattle and the near-record potato crop.

And while farm profits should strengthen annually through 1998 from the second lowest level in the past six years, it will only be modest, tempered by rising expenses, particularly for fuel, fertilizer and electricity.

In addition, the campaign to rein in government spending at both the state and federal levels combined with the constraints imposed on local government budgets will check both the growth in government employees and the cash funneled to the poor through a variety of aid programs.

“As expected, this tighter fiscal outlook creates a drag,” analysts wrote in the forecast.

Government payments to individuals through 1998 are now expected to be as much as $150 million a year lower than believed last spring, and instead of relatively stable federal employment in the state over the period, the payroll will decline by several hundred. State and local government payrolls are expected to increase, but much more modestly than previously forecast. That will mean as many 1,800 fewer new jobs a year.

Those circumstances will combine to shave nearly $300 million from the earlier estimates for total personal income and because the population will still be growing at twice the annual rate, the annual growth rate for per capita income will once again fall below the national rate.

Still, the Idaho economy should expand at a pace faster than the slowing national economy, bolstered by the diversity it has developed since breaking out of the depression of the early- and mid-1980s.

Once off the farm and out of the taxpayers’ pockets, the outlook is improved.

Analysts say there should be 1,300 more nonfarm jobs in Idaho this year than they expected back in April - 1,500 more in 1996 and 1,900 more in 1997.

And they will be in the be in the goods-producing sector, where workers are typically higher paid.

Much of the newfound strength is in construction, which had earlier been expected to take a dive because housing starts were falling off.

Residential construction has cooled, but commercial activity has plugged the gap as far as employment goes so that the construction work force should remain stable through 1998 instead of plunging 8 percent over the next 18 months.

Even the outlook is up for timber workers, who have been squeezed by soft demand for lumber because of reduced housing starts and high prices for logs because of uncertainty over supplies from government lands.

Timber employment is still declining, but economists see the drop much more gradual than before.

Overall, payrolls for the federal government and the long-depressed mining industry are the only ones that will not be growing faster than their national counterparts. And profits for small businesses - the sole proprietors and partnerships - will also rise faster than for the rest of the country.

All of that, the forecast indicates, should translate into higher wages.

The average annual wage should hit $23,930 this year, nearly $100 higher than projected earlier, and that spread should be maintained over the three following years.

That marks a 35 percent increase in the average annual wage since the economic expansion began in late 1987.

Wage and salary payments are now projected to be $60 million higher this year to nearly $11.8 billion with the same improved outlook pushing those payments to nearly $12.6 billion next year and $13.5 billion the year after that.

“After persevering through hard times, Idahoans are enjoying the benefits of the state’s economic success on a wide geographical basis,” the analysts said.