Southeast Idaho has a new labor economist, and he wants to get the word out about the resources offered by the Idaho Department of Labor.

Matthew Paskash started his new job in December, and the East Idaho Business Journal recently sat down with him to discuss the local economy, labor trends and more.

East Idaho Business Journal: So what brought you to Pocatello?

Matthew Paskash: Change of scenery. I’m from the Midwest — Indiana originally and then I went to grad school in Illinois. I just wanted to get out of my comfort zone and get back into the outdoors. Seemed like the best of both worlds for me. Back home it's just a flat, endless horizon of corn, so it's nice to stare at some mountains when I come into the office every day. If I want to check out some of the national parks, they’re a day’s drive away.

EIBJ: How are you liking the job?

MP: I'm enjoying it. It's a bit different than what I'm used to because I was in a Ph.D. program that was more focused on the research side. And this is a bit more of, for lack of a better term, customer service — helping employers get the information they need to make the decisions that need to be made or corresponding with employees or unemployed people who are trying to figure out what their options are, what they can expect, competitive wage rates. So that's a lot of it, but every now and then, my supervisor hands me a question. “Someone up high has a very specific question about this. Give us your thoughts and write a white paper.” So that's always fun.

EIBJ: What kinds of questions do employers ask you?

MP: Most often, it's how many of a specific type of occupation work in a given area so they can have some idea of how big or small that labor pool is. Wage rates is a big one. Sometimes they might have questions about what other employers are paying, and that's a tricky thing, because we can't divulge that.

So it's a lot of information gathering, trying to basically distill and summarize something into a few data points for someone to make a decision off of. If they want a more thorough analysis, then I can do that. But a lot of times, it's just a very specific question with a very clear cut answer to “what does this pay in this area?”

EIBJ: Where do you get that information?

MP: So the department, in conjunction with the Federal Bureau of Labor Statistics, gathers a lot of information. We have a number of surveys that we do on a rolling monthly, quarterly and annual basis, which measure different things like employment, wages, establishment level information on total wages paid, total employment for a given quarter. So depending on the question, we have different data collection agencies that we partner with to get that — some of which is much more comprehensive. Like we have the quarterly census of employment and wages. That's supposed to be like a census, every quarter, of every establishment in the country. No exceptions. So that's probably the most robust thing we have, but it doesn't measure everything we want. That's just looking at how many employees did you have this quarter? What was the total wages paid? That's about it.

But if you want stuff like occupational earnings, we have an annual survey we do for that, but 2021 won't be out until another couple months, so it's kind of already been dated. So sometimes we might have to make some back of the envelope adjustments. Like, “Well, recently, wage inflation has been X percent, so adjust all these figures up.” We also often have to make caveats, like, “I can tell you this, but especially the last two years, as much as what's happened, even stuff that's a year old is outdated.”

EIBJ: It was such an odd time period, it's kind of hard to compare.

MP: Yeah, there's really not any other recent precedents for what we've gone through — the wild swings of mass furloughs and layoffs in the first wave of the pandemic, to all sudden things come roaring back, and now employers are hard pressed to find few if anyone for some jobs. It seems like it's like a boomerang.

EIBJ: What's your opinion overall about how the local economy is doing?

MP: Well, the market here is hot, like everywhere else. I don't quite have an apples to apples metric to go off of, but, qualitatively, it appears to be running the hottest it's been at least since (the mid-2000s). But in any case, employers are really trying their best to get employees. There's high demand for a lot of products and services, and they just don't have enough people to produce them.

As for other indicators, the labor market is sort of what I look at day in, day out, but anecdotally, the housing market’s exploding, which is a mixed blessing. For people like me who just moved here, it is a bit disquieting to see that sticker shock of like, “I'm gonna have to pay this to live here?” And for some existing residents whose wages and earnings aren't keeping up with that rising cost of living, they're having to ask them some serious questions of “Can I reasonably expect to stay in this community for the next five years, 10 years?”

I've been hearing anecdotal stories from our other regional labor economists, especially more in the western and northern part of Idaho, of employers who are extending job offers to people. People initially accept. A month or two goes by and they have to turn it down because they really can't find housing within their price point to work there. The housing situation in Southeast Idaho isn't as constrained, it seems, as it is like Boise where the median rental units are going for like $1,400 or $1,500 a month. But here, I mean, it doesn't take a large population change to see that magnified on prices because you can't build up a new home instantaneously. It takes considerable time. So even just a small change in demand can really have huge price (impacts).

EIBJ: Is there anything about the economy here that you think is unique to East Idaho?

MP: There is an interesting blend, or at least a composition of industries, that I wasn't aware of. I knew that being so close to the national parks there would probably be a large tourism element and there is, and it seems to be growing at a pretty fast pace. I was reading about the record-setting (passenger numbers) at the Idaho Falls airport, which is now setting up weekly service to Orange County, California. The tourism's probably going to only continue to grow, which is big.

Another thing, too, that I knew about before coming, but didn't realize how much of an anchor it was, is the Idaho National Laboratory. Cutting-edge research institution, major employer, and given that it's funded, to a large extent, through federal funds, those tend to be not very volatile. So no matter if the economy is going up or down, INL is always kind of chugging along, along with a few other big cornerstone employers around here like Idaho State University, Brigham Young University-Idaho, some of the larger hospitals. So it seems like East Idaho has a lot going for it. But there's also just a lot of opportunities on the horizon, just given the population growth. There's still a lot of just undeveloped opportunities out here. That’s just my first impression.

EIBJ: What would you say some of those opportunities are?

MP: I would say technology. I know ON Semiconductor here is a very large figure in its industry. So I expect it to continue to grow, especially now with the chip shortage. It's not like this is still a predominantly rural area that's going to continue to be a predominantly rural area. This is an area that has a mix of rural and increasingly urban and higher class professional occupants living here. And I think that once the pieces start to come together, you sort of get these, to use an econ term, complementarities, where as long as you have enough of each of the basic building blocks, then bigger things can sprout from it. But if you don't have a couple of key ingredients, then the bigger things won't happen. We have a lot of different sectors, which make it a bit more diversified. It isn’t just a one-trick-pony area of the country, and in the areas that you want to see growth, particularly in high-growth industries — technology, education — we're seeing it here.

EIBJ: Do you see an education gap at all between what employers need and the types of people graduating from school?

MP: I hear of it now and then. It happens. It's not like the market’s perfectly matching the demand for skills with the available skills. There's always going to be some lag between what employers need and what workers we’ll eventually have. It's hard to quantify that. I have read some papers, and there was some evidence to suggest that mismatch is a factor. It's perhaps not the largest impediment to why we can't seem to get the workers we need to work the jobs that we want them to work. But I can't say for certain.

EIBJ: What would some of those other impediments be?

MP: It isn't so much a skills mismatch as geographic mismatch. There are fixed costs associated with moving halfway across the country for work. People tend to be risk averse, so they tend to not want to make big changes in their lives, to take on that risk, and tend to want to hold onto the sort of intangible assets that they have — things like family and community relations, which you can't take with you halfway across the country. So those tend to be some factors, which are making it slower for the workers that we have nationwide to transition to where we need them.

Some of it, too, is that for some workers in particular if you spent your entire working career doing a certain job or set of jobs, your identity kind of gets wrapped up in that. And if you're told, “This is a better job, and you're gonna have to give this all up,” (people don’t like that). Most people attach some value to the work they do, perhaps have developed coworker relationships, you name it. So all these things are little frictions that sort of slow down how quickly workers get to the jobs and they're successfully matched.

Even if the composition of skills across the workforce matches the relative need across industries, if there's just not enough people, you're not gonna be able to meet all of employers’ demands. My conjecture at this point is that there's just too much demand chasing after too few workers in general right now.

EIBJ: What should communities do to improve their economies?

MP: (Growing an economy) entails risks. But you can't expect to get any rewards unless you take risks. Some projects come to fruition and they’re great; some don't. And you kind of have to ask yourself, like any business owner or investor or any worker trying to choose an employer, "What is your tolerance for risk?" And what are your expectations for any given project and sort of just weighing costs and benefits. Sometimes, yeah, you kind of have to take a loss, but if you do nothing and just sit and wait, the market is gonna turn against you. You have to always be looking for opportunities.

EIBJ: Are there any big projects you want to be doing?

MP: Right now I've taken on looking at the health care sector in the state. We went into the pandemic with some serious gaps in the needs of the health care workforce for certain occupations — nurses, nurse practitioners, pharmacy techs, pharmacists and so on. And then in the last two and a half years, there's been a very large number of folks who just decided to quit or are expecting to quit their occupation. And we're trying to sort of get a grasp of what's going to be that expected shortfall five or 10 years from now. And then what are some ways we can address it now?

So there's obviously a pipeline metaphor. Folks who are interested in joining various education training programs, you might lose some of them as they perhaps don't like the program, or perhaps they aren't up to snuff in the program. But then once they get into working, some might get poached to work out of state. Others who perhaps realized a couple years in, “I had a different impression of this. I don't want to continue doing it,” or perhaps work all the way to retirement age and say, “I'm done. I’m going to enjoy the rest of the golden years.” And we're trying to identify along that whole pipeline of just where the leakage is occurring and where we can, perhaps, figure out how to open those valves a bit more to get people into the profession.

I think that given how large of an impact COVID had in Idaho, and given the shortages that they were seeing before COVID even hit, it was just in a particularly vulnerable state. It's probably not entirely COVID-related attrition, but I would suspect that probably COVID is a pretty large explanatory factor. And by comparison, some of our neighboring states are faring a little bit better. But even then, most of them compared to where they were in 2019 are still not doing great. So comparatively, yeah, we may not be doing great, but many other states are also, by their own relative standards, not doing great either.

EIBJ: Have you noticed any other trends that are piquing your interest?

MP: Well, one that we've been continuing to talk about in the department is this general trend the last two years of declining labor force participation. How we define the labor force: those who are currently employed, plus those who are unemployed, and to be unemployed, you have to be actively looking for work. That number in Idaho has declined, although it did kind of stabilize at the end of last year and flipped up a little bit in January. It has more or less followed a downward trajectory. The United States, by comparison, dropped in the first stage of the pandemic, stabilized for most of 2020 to 2021, and then has been slowly rising. And that is probably one of the issues going forward that we're facing with meeting future labor force needs. We have a lot of people living here and surprisingly fewer and fewer who are working or at least seeking work. And the most common explanations that we have still raise more questions than seem to answer them.

The biggest group by far would be early retirements. A lot of people took the pandemic to be like, “Hey, I'm already nearing retirement age. I don't want to work myself to death in the middle of a pandemic, when already I statistically may be more likely to be a victim of it. I’m done.” However, what makes that hypothesis of ours kind of hard to square is that Idaho is statistically also one of the youngest states. We do have quite a number of older Idahoans living here, but statistically you would expect that that silver tsunami, as we're calling it, would have a smaller aggregate impact than what we've seen in the data. So it's just a lot of head scratching.

We don't have a lot of demographic data for Idaho given that we rely on, typically, national surveys. And given how small the population we are, we usually don't get enough actual Idahoans showing up in the surveys to get any robust generalizations from it. But nationally, older Americans are probably the largest factor in that declining labor force participation rate, followed by people who lack a college degree, given that a lot of them were probably the ones most immediately hit by the pandemic. So a lot of those workers, perhaps, fell out of the labor pool and much slower to come back. But as hot as the labor market is, it should be pulling some of them back in.

Another factor is gender disparity. Nationally speaking, men, if they had a child, are more likely than similar men who did not have a child to be in the labor force. On the other side of the spectrum women, controlling for age, education and other factors, take two women, the only difference being that one had a kid, one did not, the one who had a kid was much less likely to be in the labor force in the last two years than the one who did not. And that's unfortunately due to gender division of labor within households. Hypothetically, if we managed to completely remove the childcare constraint from households, yes, many women, especially single mothers, may get pulled back in the labor market. But you might see a pullback of some fathers who perhaps were taking on extra jobs, or perhaps may themselves have wanted to be a stay-at-home dad, but for whatever reason, they were the ones who went back to work while the moms stayed home.

EIBJ: It does seem like with everything with economics, it's not a simple black-and-white answer.

MP: It sometimes can be, but I think that what we typically teach in undergrad economics is still a very crude simplification. And then once you start to actually look at the world around you, you start to realize that in many cases, there's always an exception to the rule. The rule might still account for the majority of cases but there's always those exceptions, which make you have to think harder about the process.

EIBJ: Is there anything else you want to mention?

MP: A lot of employers are really hurting trying to find workers. There's a lot of questions of “is it just me? Am I doing something bad? Or is this something that everyone's experiencing?” And I would tell them that, by and large, everyone's experiencing some degree of difficulty finding workers, retaining workers, having to have those uncomfortable conversations with competitors about, “Hey, I heard you poached so and so.” I would suggest that if they have any specific questions about “hey, does this number seem like we're falling behind the curve or do we seem ahead of it?” I'd be more than glad to sort of pull up some of the national industry trends, quit rates, job openings rates, how quickly they're managing to fill openings, and that might help them sort of gauge and see kind of where they're stacking up.

So I think that'd be the first thing I'd like to suggest to a lot of employers. And then secondly, take this recent set of challenges as an opportunity to change up your hiring policies, your retention policies. There's always opportunities to experiment and to get creative. You don't have to be committed to what you've been doing the last one or two or however many years. If it's not working, try something new.

This conversation has been edited for clarity.