Economy of Bonner County
The communities and economies of Bonner County, Idaho are vibrant and resilient, with a more diverse economy than one would expect in a relatively remote area. It is also an economy less affected by broader recessions than other communities with large tourism sectors. In 2014, the county lost a major employer when Coldwater Creek, a catalog and online retailer, went bankrupt. Although the economic effects have been significant, the impacts were not as bad as initially feared because a number of employees were hired by other local firms in sectors such as software and aerospace, and others opted to open their own businesses because they did not want to leave the area. We found that this type of resilience and commitment to the area is not unusual for Bonner County.
An Attractive Place to Live
In Bonner County there is significant employment and strong momentum in manufacturing, health care, aerospace, and advanced industries in addition to strong tourism and timber sectors. These sectors are bolstered by a culture of entrepreneurship and residents’ commitment to remaining in the area, which has led to many spinoff businesses. Compared to its peers, Bonner County’s diverse economy is more like the larger, connected communities like Redmond and Ashland, Oregon than a more rural, isolated community like McCall, Idaho. Tourism has been an excellent marketing tool for the community, rather than its only economic option.
Bonner County Economic Development Corp
231 N. Third Ave, Ste 107 Sandpoint, ID 83864
Phone (208) 265-6402 | Fax (208) 263-7623 | Toll-Free (866) 831-8413
Website >>
THE ECONOMY OF BONNER COUNTY
In this section we outline trends in Bonner County’s economy, including overall employment and wages per job, trends in income sources, and trends in specific sectors. We focus on several aspects of the economy – manufacturing, entrepreneurship, health care, tourism, and ―advanced industries‖ – as they are current points of economic strength and present opportunities that Bonner County can leverage in the future.
Population, Employment, and Income
Despite a downturn during the last recession, steady growth in employment and income over the long term led few residents to leave, which left a relatively stable population.
Long-term, steady growth in population, employment, and personal income are commonly associated with a healthy, prosperous economy. High volatility, stagnation, or decline indicates a community whose economy is struggling.
Bonner County has generally seen steady, consistent growth since 1970 in terms of population, the number of full-time and part-time jobs, and personal income. The following three charts (Figures 1-3) show long-term trends in the county. From 1970 to 2013, population grew from 15,636 to 40,699 people, a 160 percent increase. Employment grew from 5,326 to 22,425, a 321 percent increase, and personal income grew from $283 million to $1,420 million (in real terms), a 402 percent increase.
Although the most recent recession had a substantial impact on Bonner County, it also revealed the county’s strong appeal and ability to retain residents. The recession led to a drop in employment and income of 11 percent and 3 percent, respectively. However, population changed little over the same time period despite the loss of available jobs. While the long-run growth Bonner County had experienced over prior decades has been interrupted, people have not left the county in numbers commensurate with job losses. This is likely due to several factors, including connection to family and friends, the area’s high quality of life, and the expense of relocating. It appears that employment and personal income are beginning to recover since the recession. As we describe in the Migration section, 86 percent of net population growth since 2000 was from migration (as opposed to births).
Figure 4 shows the unemployment rate in Bonner County is consistently higher than in the rest of Idaho, and has been higher than the rest of the U.S. since the recession. From a high of 12.1 percent in 2010, the county unemployment rate was 8.6 percent in 2013, the most recent year for which it is available.
Despite this relatively high unemployment, employment in Bonner County has grown faster than in Idaho and the rest of the U.S. This apparent contradiction suggests that growth in jobs has not been large enough to offset growth in the labor force. Figure 5 shows relative changes total employment in Bonner County, all of Idaho, and the U.S. between 2013 and 1994. In Bonner County and the U.S. in 2013, there were 1.4 times the number of jobs than there were in 1994, and 1.26 times the jobs in Idaho. Employment in Bonner County reached a high point of 25,162 jobs in 2007, 1.57 times what they were in 1994, but total employment has not yet recovered to pre-recession levels.
Income Sources
Although earnings per job have stagnated for decades, per capita income has risen steadily due to non-labor income sources.
The levels, sources, and trends in household income help reveal the relative importance of wages and salaries in fueling the local economy. Changes in the source of income reveal broader economic and demographic trends in the community that can be difficult to see from other economic data.
Figure 6 shows that in Bonner County, per capita income has risen steadily, with the exception of a dip during the recession. By comparison, average earnings per job have declined from a high point in the 1970s, stabilized somewhat throughout the 1980s, and started to rise in the 1990s and early 2000s. Earnings declined during the recession, but started to rise a little more recently. There are a number of explanations for these trends and why per capita income has grown faster than earnings.
The first reason for this trend is due to a number of structural shifts in the local and national economy including: a shift towards a service-based economy with the primary service component consisting of the relatively low-wage retail sector; a loss of construction jobs, especially during the recession; the growth of recreation and tourism-related industries which include more seasonal or part-time work; a rise in lower-wage self-employed workers; a downturn in the housing and stock market; and long-term lingering effects from the subprime mortgage and financial crisis that extend beyond the officially recognized period of 2007-08.
Commonly another explanation for declining wages is due to the loss of manufacturing jobs, which is occurring throughout the country. Bonner County is unusual in that it has experienced a steady long-term rise in manufacturing employment, doubling from 1970 to 2013 (there were 1,189 manufacturing jobs in 1970, 2,663 in 1990, 2,290 in 2000 and 2,389 in 2013). Data from U.S. Department of Commerce. 2014. Bureau of Economic Analysis, Regional Economic Accounts, Washington, D.C. Table CA25. from 1970 to 2013 (there were 1,189 manufacturing jobs in 1970, 2,663 in 1990, 2,290 in 2000 and 2,389 in 2013). Data from U.S. Department of Commerce. 2014. Bureau of Economic Analysis, Regional Economic Accounts, Washington, D.C. Table CA25.
The second reason for the increasing importance of per capita income relative to earnings per job is because per capita income includes both labor and non-labor income (NLI) sources, and the latter has been growing very rapidly. NLI includes investment and retirement income, as well as Social Security, and medical payments such as Medicare. Unlike most sources of labor income, non-labor income, which often arrives in the form of a dividend check or retirement benefit, can be more difficult to see in a local economy. NLI has grown to be more than half of total personal income in Bonner County (rising from 31 percent of total personal income in 1970, to 43.8 percent of total in 1990, to 53.7 percent of total in 2013).
In many geographies, non-labor income is often the largest source of personal income and also the fastest growing. NLI in Bonner County has outpaced growth of labor earnings: from 1990 to 2013, NLI in Bonner County grew by 173 percent, while labor earnings grew by 84 percent. Since 1990, NLI sources have accounted for 62 percent of new growth in personal income. In 2013, non-labor constituted 53.7 percent of all personal income in Bonner County (see Table 1).
Non-labor income (NLI) consists of investment income, retirement payments, Social Security, medical payments (e.g., Medicare and Medicaid), and payments from social welfare programs. NLI is one of the largest and fastest growing sources of income, constituting more than one-third of personal income in the U.S. West and more than half of net growth in real personal income in the last decade. Non-labor income is affected by such factors as the stock market, retiring Baby Boomers, and changes to Medicare, Medicaid, and Social Security.
In Bonner County the bulk of NLI consists of investment income (Dividends, Interest, and Rent), which in 2013 made up 30.8 percent of total personal income. Investment income is associated with higher educational attainment, an older population, and larger construction, health care, and real estate sectors.
2 U.S. Department of Commerce. 2014. Bureau of Economic Analysis, Regional Economic Accounts, Washington, D.C. Tables CA05, CA05N & CA35.
Age-related payments (e.g., retirement, social security, Medicare) are the second largest type of NLI in the county, constituting 15.4 percent of total personal income. These types of payments are generally associated with a growth in the health care sector.
Hardship-Related Payments (e.g., Medicaid, income maintenance benefits) constitute a small portion (5.2%) of total personal income. These payments are generally found in counties with lower household income and higher poverty than Bonner County.
An aging population, stock market and investment growth, and a highly mobile population are some of the reasons behind the rapid growth in non-labor income. With the Baby Boom generation reaching retirement age, it is likely non-labor income will continue to be a growing source of personal income.
The growth in non-labor income can be an indication that a place is an attractive place to live and retire. The in-migration of people who bring investment and retirement income with them is associated with a high quality of life, good health care facilities, and affordable housing, which is important for those on a fixed income. Non-labor income can also be important to places with struggling economies, either as a source of income maintenance for the poor or as a more stable form of income in areas with declining industries and labor markets.
Overall, Bonner County is fortunate to have investment income as the highest percentage source of non-labor income, and from age-related sources because these sorts of income are closely tied to stimulating other sectors of the economy.3
To read into more detail Click Here for the full document "Bonner County, Idaho’s Resilient Economy" (PDF) or Read Online Here >>
Credits for Information
All data information and charts provided by HEADWATERS ECONOMICS - https://headwaterseconomics.org
©Copyright 1998- by Sandpoint.com - All rights reserved