COVID-19 still choking Idaho’s economy

But economist says state might emerge strong faster

POST FALLS — If you thought the health of citizens was in trouble, take a look at the economy.

Sam Wolkenhauer, the northern regional economist for the Idaho Department of Labor, spoke to the Post Falls Chamber of Commerce on Tuesday about the economic effects of COVID-19 on the U.S. since February.

During the chamber’s monthly luncheon at Red Lion Templin’s Hotel, Wolkenhauer pointed out that between 2011 and 2019, the U.S. was creating about two million jobs per year. While there was a little fluctuation in the job market, it was nothing compared to the crash the country is now experiencing.

“We shed about 22 million jobs in one month,” Wolkenhauer said. “That is more jobs lost than at any point since the Great Depression, and it all happened in a six-week span.”

Wolkenhauer says the 22 million undersells the scope of the economic damage inflicted on the country. Due to the mass amount of Americans furloughed since COVID’s first major peak in March, many workers began using unemployment insurance options like the Paycheck Protection Program. Including those workers, Wolkenhauer estimates about 50 million people have been completely sidelined.

Idaho, as one of the first states to reopen and last to close, was not immune to the effects of COVID-19.

“In the space of one month, you have over 100,000 people filing for unemployment in a state of under two million people,” Wolkenhauer said. “There’s really nothing you can say to describe it other than an economic deluge, unlike anything we’ve seen before.”

The U.S. Bureau of Labor Statistics released a report last month showing 5 million new U.S. jobs, although about 50% of those are part time. In comparison, a normal economy reports about 95% full-time positions and 5% part time. The report doesn’t show the number of people who were at one time temporarily unemployed but now have permanently lost their jobs.

“A lot of businesses are folding, so their workers are being classified as permanent job losses,” Wolkenhauer said. “Since they already lost their jobs and were on temporary furlough they don’t show up in the headline number as a new loss.”

While this may seem like a small technicality, an increase in permanent job losses drives a long-lasting economic recession, he said.

“It’s important to understand this vision of returning to ‘normal’ is not happening,” Wolkenhauer said. “The lockdown orders started the cascade of financial damage, but there is a recession with its own logic and its own momentum at this point.”

Despite all these negatives, Wolkenhauer said there’s a chance that Idaho could benefit after the anticipated two-to-three-year economic recovery period. Being the second fastest-growing state in the country, Idaho has seen an influx of residents from California, Texas, Arizona and western Washington. This is expected to increase with the prevalence of working remotely and telehealth services, which allow residents of congested urban areas to move inland.

“We’re already starting to see the first trickle of an exodus from these big expensive metro areas, and they’re moving to affordable places with a lot of suburban space,” Wolkenhauer said.

Places in the mountain west, like Idaho, have a stronger potential to expand with this migration due to its large amount of open land, developing urban areas, and natural features.

“The Idaho State Department of Labor thinks Idaho can structurally benefit from this in the long run, helping us pull out of the recession faster than other states,” Wolkenhauer said. “It’s easier to get out of a recession when you’re gaining people, not losing them.”