How high wages have affected Idaho’s workforce

The most recent Jobs Report for small businesses reveals concerning trends impacting Main Street businesses throughout the United States.

Suzanne Budge, the Idaho state director responsible for monitoring hiring measurements on behalf of the National Federation of Independent Business (NFIB), shares the same observation. She emphasizes that wages are not regarded as the primary concern in Idaho.

“The problems small-business owners are having in finding workers is most certainly not a wage issue,” Budge said. “Smart of our state legislators to have stopped House Bill 48, which would have given local governments permission to set their own minimum-wage rates, dead in its tracks. This would have only exacerbated the problem small-business owners are having staying open.”

The Jobs Report found 36% have already raised wages and another 22% intend to. It has been reported that the average wage for all occupations in Idaho reached just under $25 an hour last year.

Despite raising wages, small businesses are struggling to find qualified workers due to issues of inflation, lack of access to the workforce, and supply chain problems, all of which are significant concerns for small businesses.in

“We know that wages are going up, costs are going up. Small businesses are getting challenged across the board to small and independent businesses, meaning they’re having to raise wages, they’re having to raise costs,” Budge said. “They’re still suffering supply chain issues, even months and months after the pandemic seems to have moved on.”

NFIB’s jobs report is released on the first Thursday of every month and is considered a crucial component of the association’s Small Business Economic Trends report, also known as the Optimism Index. This index, released on the second Tuesday of each month, is a national overview and does not provide a breakdown by state. 

Key insights from the latest Jobs Report include the following:

• Seasonally adjusted data shows that 42% of small business owners reported unfilled job openings, marking a 2-point decrease from May.
• The percentage of owners with unfilled job openings surpasses the 49-year historical average of 23%, although it is 9 percentage points lower than the record high of 51% reached in May 2022.
• Skilled worker openings decreased by 3 points, with 35% of small businesses having such vacancies, while unskilled labor openings decreased by 2 points, with 18% of businesses having these vacancies.
• The labor force participation rate remains below pre-COVID levels, contributing to the shortage of available workers for open positions. Although job openings are decreasing, they still remain at historically high levels.

According to Shannon Madsen, the district director of the U.S. Small Business Administration (SBA), the administration has not specifically examined the contributing factors to this particular challenge. However, Madsen highlights that the agency actively tracks a range of data points to support businesspeople in addressing challenges and planning for the future. Business owners can access a snapshot of Idaho and other states through the Idaho Small Business Economic Profile on sba.gov. Furthermore, the SBA’s Advocacy office recently released data on major Metropolitan Statistical Areas (MSAs), including Boise, as part of the Metropolitan Area Profiles for the West 2023. 

“Since every business is unique, the SBA and our partners offer a variety of resources to assist entrepreneurs start, expand, and help their small businesses recover,” Madsen said. “This includes programs to help them identify the tools and know-how to tackle the myriad of issues and opportunities their business experiences.”