How ‘unspoken inflation’ affects the Treasure Valley’s growth

The Treasure Valley in Idaho has experienced a significant surge in population and job opportunities, bringing both opportunities and challenges. Affordable housing prices and wages have become pressing concerns as businesses and individuals flock to the region in search of opportunities. According to economist Steve Scranton of Washington Trust Bank, there is an issue of “unspoken inflation,” in the Treasure Valley, which highlights the need for proactive solutions in order to maintain and continue its success.

“I call this the ‘unspoken inflation’ because businesses, if compelled to pay higher wages and benefits, have been able to pass those costs directly to the price of their goods and services for the last three years,” Scranton said. “That’s what is pushing the prices up and causing inflation overall for both the US and the Treasure Valley.” 

Over the past five years, the Treasure Valley experienced remarkable job growth, with a cumulative increase of 19.6%. Scranton attributes this economic expansion to the region’s pro-business reputation, setting it apart from its surrounding states. Moreover, the one-year job growth in the Treasure Valley surpassed the national average by a significant margin (4.6% vs. 2.5%).

Scranton pointed out that one of the challenges arising from the influx of people moving to Idaho is the shortage of available homes. “The average weekly earnings for every region of Idaho, including the state as a whole, are below the US average – which is very appealing to businesses,” he remarked. “However, for the average worker, despite witnessing significant wage increases, their earnings still fall short of the US average, while home prices in Idaho and the Treasure Valley surpass the national average.”

In June, the median house price in the Treasure Valley reached $545,000, while the average weekly earnings stood at $1,019, compared to the US average of $1,155. 

According to Scranton, a potential solution to address the impact of “unspoken inflation” is to address affordable housing and find a balanced approach that considers both economic expansion and housing needs for the workforce.

As the Treasure Valley remains an attractive hub for businesses and workers, Scranton addressed the importance of affordable housing for sustained success. By prioritizing housing affordability, Idaho can continue to build a thriving community that benefits both businesses and residents.

“The three key stakeholders – existing neighborhoods, the government responsible for zoning and permitting, and builders – have got to work together with each other,” he stated. “Affordable housing might mean that we change the way neighborhoods look because you need more density–and it might require redefining the housing preferences for many individuals.”.