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Idaho leading the country in earnings growth, not necessarily wages

Idaho ranks 44th in the United States for personal income per capita.

BOISE -- Did you see the recent Wall Street Journal article about Idaho pay rising at the fastest rate in the country? Well we're here to tell you that's not exactly true.

Economists say it is true that Idaho residents lead the nation in earnings growth, but a lot of factors contribute to that, not just individual wages. Idahoans' earnings increased 5.3 percent from 2016 to 2017, outpacing the national growth rate of 3.1 percent. A Bureau of Economic Analysis (BEA) study shows earnings was the leading contributor to growth in personal income in Idaho and a few other nearby states, therefore income gains were widespread. However, Idaho ranks very low in personal income per capita.

Idaho Department of Labor regional economist Jan Roeser says a growing job market and labor shortages are pushing wages up a little across the board, as Idaho leads the nation in earnings growth.

But to clear up some confusion: earnings doesn't just mean wages.

"Wage growth across all industries was only about 2 to 2.5 percent. When we're looking at that earnings report, it includes sole proprietors, it includes our farmers, it includes our entrepreneurs, those working in 'gig society'," Roeser said. "There's a lot of under-the-radar jobs that are included in that earnings report but they wouldn't show up in our wage report. So there's a gap there."

"So there are sub-components to that personal earnings report that aren't wage based at all," Roeser added, "We do feel like wages are going up but maybe not quite at the rate of computer and electronic product manufacturing."

Experts say durable goods manufacturing - particularly computer and electronic products - led earnings growth last year. Earnings grew in industries like agriculture, food services and construction, too. A lot of the sectors experiencing those upward trends are also growing their jobs. Idaho currently has an incredibly low unemployment rate, lower than national unemployment.

"We've had some really great employment growth as far as numbers but also had some growth in wages. And part of that stems from the fact that we do have a very low unemployment rate. So that's putting pressure on employers out there that want to attract the best and brightest. And so they have to pay a little bit more they're finding and they don't want to have as much turnover as they anticipate might happen like it did pre-recession," Roeser told KTVB. "They are finding they need to spend a little bit more on wages too just because we are such a low wage state in general."

But there are also labor shortages, she says.

"We have a lot of highly skilled jobs going unfilled and they're having to recruit from across the nation and globally. So we do bring in individuals into Idaho in certain occupations that are hard to fill and it would be nice to be able to grow our own and fill those ourselves."

As more people move into the area, economists say, our trends continue upward.

Yet, Idaho ranks 44th in the United States for personal income per capita.

"We have a big concern," Roeser said. "We need to see that per capita income start increasing... Being the lowest means we have some room to grow upward. So when we see this amount of growth we're pretty happy about it."

To help boost pay increases for Idahoan, the Idaho Department of Labor is looking at apprenticeship programs. The goal is to allow people to continue working and making money while learning a new skill that will increase their earning potential.

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