Bringing the Economy Home

Bottom Rung: Gov. Otter Touts Idaho’s Low Wages To Attract Gun Companies

Joe Jaszewski / Idaho Statesman

For the last two years, Gov. Otter has pushed for lower business taxes, a state-based health insurance exchange, and hiring tax credits.

Gov. C.L. “Butch” Otter is using Idaho’s low wages as a selling point. In a letter sent to out-of-state gun manufacturers last month to encourage them to relocate to Idaho, Otter touts the comparatively low cost of labor here.

This week we’re reporting on wages in Idaho. The governor portrays as an asset the wage trends we’ve been reporting on. Bureau of Labor Statistics data show Idaho has the largest percentage of minimum wage workers in the country; Idaho’s average per capita personal income is second from the bottom. Mississippi is the only state where personal income is less.

In the letter sent to 79 gun and ammunition makers in 28 states, the governor highlights Idaho’s low wages as a way for those companies to save money.

“Business profits increase in Idaho. Idaho’s average cost for our highly skilled, often custom-trained workforce is 21 percent less than Connecticut.” – Gov. Otter’s letter

Spokesman-Review reporter Betsy Russell posted a letter sent to companies in Connecticut. Idaho Department of Commerce spokeswoman Megan Ronk says her agency calculated workforce cost differences using Bureau of Labor Statistics data for each of the states where letters were sent.

Connecticut has the highest per capita personal income among states. Only in Washington, D.C. is it higher.

Connecticut Wages

$20.13 per hour = median wage in Conn.
$25.73 per hour = average wage in Conn.
$58,908 = Conn. per capita personal income in 2012

Idaho Wages

$14.51 per hour = median wage in Idaho
$18.52 per hour = average wage in Idaho
$33,749 = Idaho per capita personal income in 2012

Gov. Otter is out of the office this week to celebrate his 71st birthday, which was on May 3. His spokesman, Jon Hanian tells StateImpact the governor is simply using all the tools available to him to entice new businesses to Idaho.

“I think we’re going to leverage every advantage we have here in Idaho to attract business,” says Hanian. “The governor is a businessman.”

The Otter administration hasn’t been shy about making it clear Idaho welcomes the gun industry. The state has made a concerted effort to lure firearms makers to Idaho. “Most states aren’t right for the firearms industry, but Idaho is,” said an Idaho Commerce Department employee in this 2011 video from the national SHOT Show. There are more than 180 gun and ammunition manufacturers already in the Gem State.

When asked if the governor’s letter was playing up a sore spot for many Idahoans — that wages are low, Hanian responded: “I think the point he was making was that our workforce is highly competitive for prospective employers when they are considering things like where to locate, or relocate a company.”

The letter also mentions Idaho’s low energy costs, low health insurance costs, recent tax cuts, and a balanced state budget. Hanian says Gov. Otter’s main selling point is that Idaho is predictable for business.

“You want predictability in taxes, you want predictability in labor costs, you want predictability in your costs,” Hanian says. “Right now, in this business sector, in a number of states, there is anything but certainty. That’s not the case with Idaho.”


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