Paul A. Lewin and Willem J. Braak co-authored this piece.
Education is a critical indicator of economic growth. Most importantly, it provides the skills and knowledge necessary to facilitate innovation. As a result, the market place allows the average worker with a college degree to earn 50 percent or more than peers with a high school diploma. This, in turn, provides the purchasing power that fuels consumption and keeps the economy going. Yet Idaho’s rate of college matriculation, graduation from four year public colleges, and average per-capital income are among the lowest in the country.
For a recent report funded by Idaho’s J.A. and Kathryn Albertson Foundation, we used data from the American Community Survey to examine educational attainment and earned income in Idaho’s predominant industries and occupations.
First, we found that Idaho’s economy is concentrated in industries such as agriculture, construction, wood products, food manufacturing, and computer and electronic manufacturing. These five sectors represent 22 percent of employment in Idaho, compared to 12 percent nationally. With the exception of computer and electronics manufacturing, these are low-wage industries — which explains part of Idaho’s low average per-capita income.
Second, a few Idaho industries exhibit equal or higher educational attainment and wages than industry peers in other states: agriculture and forestry, furniture manufacturing, wood product manufacturing, and computer and electronics manufacturing. However, these industries, with the exception of computer and electronics manufacturing, have a lower “return on investment” in education. For example, for each additional year of education, workers in agriculture can expect a 4.3 percent increase in their wages, compared to a national average for all industries of 7.7 percent.
Third, we found that Idahoans have lower educational attainment and generally earn lower wages than their peers in similar occupations across the state border. Idahoans in higher-paying occupations — such as legal services; computer and mathematical; and life, physical, and social sciences — lag significantly behind their national peers in both education and wages. Those filling management positions in Idaho are 13 percent less likely to have a college degree and earn 16 percent less than peers in other states.
Finally, we found that the Idaho faces a challenge of migration. While net-migration of college-educated workers is neutral, there is a significant influx of workers with a high school degree or less. All told, the increase in Idaho’s population through migration represents a low level of schooling.
Increasing investment in higher education at the state level seems like a logical step. But without hand-in-hand efforts to creating job opportunities, it may merely increase the migration of educated Idahoans to neighboring states.
These difficulties are not insurmountable. Computer and electronic manufacturing is a bright spot for Idaho’s economy and shows that a sparsely populated state like Idaho can be competitive in a high-tech industry. This pulls high-end agriculture along with it, like the wine industry around Boise.
Communities in Idaho have undertaken projects both to increase the number of well-educated workers and to create jobs that build on existing resources. In Twin Falls, the new Chobani facility is able to draw resources from the local dairy industry and collaborate with the College of Southern Idaho on job training. And while Boise once held the dubious distinction of being the only metropolitan area in the country without a community college, in 2007 local tech companies partnered with the Chamber of Commerce and successfully passed a ballot initiative to open the College of Western Idaho. Further north, the residents of McCall have started a privately-funded initiative to offer place-based education in topics such as tourism and natural resources.
In these communities, agriculture, tourism, and technology have helped jump-start economic growth. It is education, however, that fuels growth for Idahoans and their economy alike.
Paul A. Lewin is an assistant professor in the department of Agricultural Economics and Rural Sociology at the University of Idaho. He does research in rural economic development and assists extension and communities across Idaho through programming and analysis in community economics. Before joining the University of Idaho, Lewin worked in community and economic development across Latin America and subsequently as an economist in both government and private sector positions in Europe and the United States. His research program includes entrepreneurship, migration, community economic resilience and dynamic changes of community and small regional economies. He is fluent in English and Spanish.
Willem J. Braak works with communities and educators to build sustainable and healthy economies as an independent consultant. After working in the private sector, he joined the University of Idaho as an Extension Educator and Affiliate Faculty with the Department of Bioregional Planning and Community Design. In this role, he conducted presentations and workshops on community economics, entrepreneurship, innovation, and the power of incentives throughout Idaho. Braak holds an MBA from the University of Groningen in the Netherlands and a master’s degree in Bioregional Planning & Community Design from the University of Idaho.