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FDIC offers more evidence of rural plight

Federal analysts are providing more evidence of continued hard times in rural Idaho despite mounting indicators that the state economy is on the upswing.

The Federal Deposit Insurance Corp., in its quarterly assessment of state economies, said the continued erosion of Idaho’s timber industry has accounted for another 4 percent loss of relatively high-paying manufacturing jobs.

The Associated Press

http://www.magicvalley.com/news/business/index.asp?StoryID=5637

That was on the heels of a 3.7 percent loss in manufacturing employment the year before.

"While the number of jobs in this subsector is small, they are important to rural economies because they are relatively high-wage jobs," FDIC analysts concluded.

At the same time, nonfarm employment grew by nearly 1.4 percent, one of the fastest rates in the nation, but several recent state employment reports have shown the bulk of those new jobs are generated in the most populous counties. Work in the service sector, which is viewed as generally lower paying, accounts for three times as many paychecks as other job classifications.

"There are two Idahos," private economist Don Reading said on Thursday. "One is the rural counties that population estimates show are still losing people while there are pockets of vitality in the urban areas. For those rural areas, in relative terms, those timber jobs might not look very big, but in those communities they can be extremely important."

State economists reported that from the end of 2002 to last January, Idaho lost another 1,000 jobs in the wood products industry, amounting to another 10 percent drop. Once Idaho’s leading manufacturing sector — 19,000 jobs in the late 1970s and 15,000 in 1990 — timber-related employment is now under 9,000 and steadily falling.

"There can’t be but a handful of sawmills left in Idaho," AFL-CIO President Dave Whaley said. "It is really crippling rural Idaho. They were good paying jobs. They were steady income for many, many years and they were the backbone of our communities."

Idaho’s smallest cities have lost population or experienced no growth since 2000. Experts blame the flight on the absence of jobs in general — let alone higher-paying ones.

Timber has fallen prey to competitive pressures from Canada, curtailed logging on federal land and improved efficiency creating intense competition at mills — sometimes forcing them to close.

That kind of disruption has led to a 14 percent increase in bankruptcies over the past two years, the FDIC report said. People and businesses have been filing for bankruptcy in Idaho at a rate more than 20 percent higher than the rest of the country.

That increase is entirely outside the two growth centers of Boise and Coeur d’Alene, which saw a decrease in bankruptcies.

Filings are up 20 percent in the Twin Falls bankruptcy court office from a year ago, 10 percent in the Moscow office and 7 percent in the Pocatello office.

"There’s really trouble out there," said Jim Riley, executive director of the Intermountain Forest Association in Coeur d’Alene. "You used to go into these rural communities that had natural resource-based economies, and they had very robust infrastructures, working together to improve the schools, and there was a lot of energy there.

"Now there’s just not that energy there anymore," he said. "They’re not as engaged."

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