The Workforce Shortage
According to research analyst supervisor at the Idaho Department of Labor (IDOL) Craig Shaul, the labor force dilemma has been on the plate for quite some time.
“The labor force has become tight the last couple of years, especially after the pandemic,” Shaul said. “The current workforce situation is very similar to what it’s been like for the past year, where we have low employment rates with employers struggling to find workers.”
IDOL’s economic assessment of the Idaho labor force in 2022 found an increase in the unemployment rate. Unemployment increased from 2.5% (at the start of the year) to 3% (at the end of the year).
Increasing unemployment rates in Idaho are expected to continue, according to Shaul. IDOL predicts an increase from 3% to 3.5% in Idaho for the whole year.
“This increase has to do with a slowdown in the labor force, although the jobs are still increasing,” Shaul said. “Our projection for 2023 is that we’ll see a little bit of an increase in the unemployment rate. It’s an increase, but it’s still very low.”
Despite the labor force shortage, the department found that Idaho ranks among the lead states with jobs above pre-pandemic levels, and the state’s economic strength continues to lead the nation. However, labor force supply limitations will be a long-term challenge.
Nonfarm Growth Industries
IDOL’s labor force growth assessment found nine industries projected for growth — in terms of nonfarm jobs — with the largest growth industries expected to be health care and construction. Following those two industries are jobs within education, leisure and hospitality, transportation and warehousing, manufacturing, professional and business services, retail trade and wholesale trade.
Nonfarm Declining Industries
While wages have increased, housing scarcity and prices continue to pose a challenge to the labor force and job growth across the state. As a result, the decline in the number of jobs within the umbrella of financial activities — finance and insurance, insurance carriers and real estate, for example — went down by 1% in 2022, according to Shaul.
“That one, I attributed directly to the interest rate increases and the slowdown in the housing market,” he said.
IDOL found that additional, miscellaneous services such as maintenance repair and hairdressers are down by 5.3% and appear to be struggling the most.
“That is probably a combination of things — people’s spending patterns have changed since the pandemic,” Shaul said. “Another might be that employees are having a hard time filling those jobs, and so some of those jobs are closing. It’s been harder for some industries to fill those positions than others.”
Although unemployment rates are rising, the department saw a decline in job listings per unemployed person in the state. Earlier in the year, it was as high as 2.7%; it has since decreased to 1.7%.
IDOL’s Solutions to the Workforce Shortage
The Idaho labor force participation rate is low, at 62.5%, and IDOL expects that to remain consistent for the foreseeable future. For that reason, the department is looking to connect employers with the workforce and fill empty job positions in innovative ways. By working with the Workforce Innovation and Opportunity Act (WIOA), IDOL intends to help connect job seekers with employers and enable funding for training programs, youth programs and apprenticeships.
According to Ryan Whitesides, labor economist at IDOL, the department plans to continue face-to-face interactions between employers and workers by hosting bi-monthly job fairs and hiring events, as well as allowing employers to use the department’s facilities to host job interviews for various industries.
“The employers have a presence here twice a month,” Whitesides said. “We have really good participation relative to the amount of employers and job seekers in the community to make those face-to-face connections.”e