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Median income rises in Idaho in 2008
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According to the US Census Bureau, Idaho's median income for 2008 is $47,576, nearly $10,000 more than the nation's lowest median income in Mississippi. The Census Bureau also reports that Idaho's median income is rising at 2.9%. At a time when the inflation rate is currently -1.5%, this seems to be a positive for the Gem State.
It is important to note, however, that during 2008 inflation was below 3.7% for only one month of the year. Typically inflation has run about 3%. This means that during a more typical and stable economic period Idahoans are slowly losing ground against inflation. Inflation has been negative for most of 2009, but many economists are predicting high inflation around the corner as a result of government spending and debt.
These statistics are a two-edged sword. Idaho's comparatively low median income (on the border between the lower and middle thirds of the scale) is offset in part by the state's lower cost of living. The state has long been a popular destination for those seeking an escape from the high prices and taxes of states such as California, and this will do little to diminish that. However, if this trend continues over time, Idaho could see its median income decline compared to other states, making it less attractive. If the decline is high enough, workers may consider leaving Idaho for greener pastures.
Similarly, businesses who move to Idaho because of the low median wage have a vested interest in keeping it low. While this may make Idaho an ideal outsourcing destination, it may tend to further discourage high-paying jobs, many of which have already been cut due to the recession and may not come back any time soon.
On the other hand, some analysts predict Idaho will be among the first states to recover from the recession. If the recovery comes soon enough and strong enough, Idaho could become one of the prime destinations for workers relocating from other states where the recovery is more stubborn. Our unemployment rate is still low compared to the national average, and our low population makes a rapid decrease likely.
For the short term, at least, Idaho's low median income and continued growth will work to its advantage. For the long term, however, inflation could work against the state as the median income falls farther and farther behind. While many move here for the Idaho way of life, it will not be enough to hold them here if the state cannot keep pace with income growth.
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