Hello, and happy start of summer!
For those of us in the Tetons area, summer has started with quite the bang.
On Monday, June 3, my colleagues and I on the Jackson Town Council passed a 120 day moratorium on applications for large new commercial buildings.
On Thursday, June 6, the Teton Pass road was temporarily closed by a crack in the asphalt about a mile west of the summit.
On Friday, June 7, Teton Pass was closed again when a mudslide covered the highway about a mile east of the Idaho state line.
On Saturday, June 8, the previously cracked portion of the Teton Pass road failed “catastrophically” when a large section of highway completely gave way. As a result, the Teton Pass road will be closed for at least another couple of weeks before a temporary detour can be built. When the road will be fully repaired is anyone’s guess,
Before the Teton Pass road began to crumble, I thought this newsletter would focus on the moratorium – it’s a big deal, especially for the larger questions it raises about the community’s trajectory.
I pivoted to the Pass collapse, though, because of its immediacy. The collapse also raises larger issues about the community’s trajectory, but those, too, will also have to wait for another day.
Instead, this edition of CoThrive will focus on what data can tell us about the effects of the Teton Pass closure. Broadly speaking, these fall into three buckets:
- Traffic;
- Taxable sales; and
- The effects on commuters.
What can’t be evaluated is how the road closure will affect the region’s overall economy. There are so many facets to the closure, so much uncertainty, and so little relevant data that it’s currently all-but-impossible to do anything more than speculate about the slide’s overall economic effect.
What can be done, though, is to talk about what matters most: How the slide will affect the thousands of Teton County, Idaho residents who work in Teton County, Wyoming.
(Note: As if the entire Teton Pass issue isn’t messy enough, things are made even more confusing by the fact that the road over the pass connects two different Teton counties. To make things a bit simpler, I will refer to Teton County, Wyoming as “Jackson Hole” and Teton County, Idaho as “Teton Valley.”)
My big take-away is that every day Teton Pass is closed, it’s costing the typical Teton Valley-to- Jackson Hole commuter $168: $88 in foregone wages and another $80 in additional driving costs. A total of $840/week for workers earning an average of $1,600/week.
Apply that $168 daily loss to the roughly 3,500 people commuting every day, and the aggregated daily cost of the slide to Teton Valley residents is around $600,000.
On top of that is the roughly $100,000/day it’s costing residents of Wyoming’s Star Valley. This is because their commute takes longer due to an extra 3,250 Teton Valley commuters driving the Star Valley-to-Jackson Hole road up the Snake River Canyon.
Things will get better when the temporary detour re-opens Teton Pass, but even then commuters will spend more time than usual getting from Teton Valley to Jackson Hole. If those taking the “detoured” route end up spending an extra 40 minutes/round trip, that extra time will cost Teton Valley commuters roughly $100,000 day.
On top of this, of course, is the yet-to-be-determined economic effects on not just Jackson Hole’s businesses, but those of the entire region. That figure will likely reach the millions, if not tens of millions. As I note, though, there’s currently no good way to estimate that final figure.
What is clear, though, is that because they depend on Teton Pass to link visitors staying in Idaho to Wyoming’s national parks, Teton Valley’s tourism businesses are far more vulnerable than those in Jackson Hole. As a result, they are likely to suffer the greatest economic harm from the slide.
All this is important. What really matters, though, is the human costs associated with the slide. In the blink of an eye, thousands of peoples’ lives have been disrupted, in many cases profoundly. Even after the temporary road is built, Teton Valley residents and the people they work for will have a more challenging life. Their time with family, their income, their ability to strike a work/life balance, and so much more will be compromised in ways we can only begin to imagine. All this is far more important than what will happen to the economy.
- Key Findings
- Traffic
- Taxable Sales
- Workers As Inputs
- Workers As Living, Breathing People
- The Costs
- Comment
As always, thank you for your interest and support.
Jonathan Schechter
Executive Director
PS – This is my first CoThrive newsletter in several months. Deepest thanks to those who’ve inquired about my well-being.
Happily, I’m healthy and doing well. Instead, I’ve gotten sidetracked by both other work priorities and the opportunity to do more traveling than I’ve enjoyed in years. The travel opportunities are going to continue through the end of summer, so please adjust your CoThrive-related expectations accordingly.
One other factor has also kept me from publishing this newsletter: my desire to say something meaningful.
By this I mean that over the past few months, I’ve taken several stabs at writing new CoThrives. Each time, though, I’ve been unhappy with the result. Why? Because I came to believe I wasn’t offering readers something truly meaningful.
Was I writing about something interesting? Arguably. But was it also insightful? Did it cast a new light on something that really mattered? Because I didn’t think so, I didn’t want to waste your time with it.
Put another way, in putting out these newsletters I try to focus on quality over quantity. I hope that resonates with you.
Key Findings
The table below summarizes my research into how the Teton Pass closure will affect the people living in Jackson Hole, Teton Valley, and Star Valley. It looks at three areas of interest: the overall economy, commuters, and traffic.
Traffic
Arguably, the Teton Pass road closure could have come at a worse time, but it’s hard to imagine how much worse. This is because two realities are equally true.
One reality is that, out of 3,118 counties in America, Teton County, WY ranks first in how much of its total income comes from investments. As a result, for residents as a whole, no county in America is less dependent on commerce.
The other reality is that the part of Jackson Hole’s economy that does rely on commerce is hyper-dependent on tourism. For example, in 2022, along with having the nation’s highest level of investment income Teton County WY also ranked in the top 1% of all counties in how many of its total jobs were related to tourism.
Because so many tourism-related jobs are hands-on, tourism businesses need to employ a lot of people. The industry’s economic model, though, often requires tourism businesses to pay relatively low wages.
Figure 1 captures this reality. Nation-wide, tourism-based jobs typically pay only around 40% as much as non-tourism jobs. In Teton County, tourism is a better-paying industry, but still only pays around half that of other professions. (Over the past few years, the COVID-driven influx of higher-paying remote-work jobs in finance, consulting, and tech has caused the pay gap between Teton County’s non-tourism and tourism jobs to increase. And even those working non-tourism jobs earn far less than those residents earning investment income.)
Until a few decades ago, Jackson Hole’s geographic isolation created close links between the local economy and housing prices. Over the course of this century, though, improvements in technology have rendered that isolation increasingly moot, greatly increasing the demand to live in Jackson Hole. As that has happened, housing prices have skyrocketed, forcing the lower- and middle-income people who once could afford to live in the Jackson Hole valley to move to Teton Valley or Star Valley. As that has occurred, the roads leaving Jackson Hole west over Teton Pass and south down the Snake River Canyon have become increasingly important conduits for the most vital of service industry assets: employees.
The two graphs below get at this.
Both graphs use data from automated Wyoming Department of Transportation (WYDoT) traffic counters. These track the number of vehicles using Teton County’s roads every day.
The graphs below look at the average number of vehicles entering and leaving the Jackson Hole valley each day during the slowest and busiest traffic months of the year: January and July respectively. They also look at two years: 2017, the year WYDoT installed a counter near Wilson, and 2023, the most recent full year. While the counters can’t distinguish between local, commuter, commercial, second home, and tourist traffic, the slowest month suggests the year-round baseline of commuter traffic, while the busiest month suggests the summer surge of tourist traffic.
Figure 2 compares the traffic in 2023’s slowest and busiest traffic months on the three roads funneling traffic into and out of the Jackson Hole valley:
- North: Highway 89/189/191 at the Gros Ventre Junction;
- South: Highway 89/189/191 south of the Town of Jackson;
- West: Highway 22 east of Wilson
Three points jump off of this graph.
First, summer traffic is about twice as busy as winter’s.
Second, if we use winter’s traffic as a baseline measurement of commuters plus some combination of local, commercial, and tourist traffic, then most of Jackson Hole’s commuters are coming from Teton Valley and Star Valley.
Third, if we assume tourism-related vehicles account for most of the difference between July’s peak traffic number and January’s nadir, then nearly half of all tourist traffic is coming into the Jackson Hole valley from the north; i.e., from Yellowstone and Togwottee Pass. In contrast, only about one-quarter of tourists are coming east over Teton Pass, and perhaps fewer.
This latter fact suggests that even if Teton Pass is closed to tourism-oriented vehicles this summer, the overall affect on the local economy may be lighter than feared. In particular, the airport and northern entrance to the Jackson Hole valley will remain open and unimpaired; ditto the southern entrance. Then factor in the fact that tourists who might have targeted driving over Teton Pass have the option of driving into Jackson Hole from the south, and the overall drop in Jackson Hole tourism may not be too bad.
The same will not be true for those Teton Valley tourism businesses marketing their proximity to Jackson Hole, Grand Teton National Park, and areas beyond.
Figure 3 looks at how traffic flows changed between 2017 and 2023.
The big surprise here is that the 2017-23 growth in the number of vehicles coming into and out of Jackson Hole during the winter exceeded the growth in the number of vehicles coming into and out of Jackson Hole during the summer.
In other words, WYDoT’s data strongly suggest that the growth in Jackson Hole’s traffic is being driven not by tourism, but instead by people commuting into Jackson Hole.
More specifically, other WYDoT data suggest the number of vehicles coming up the Snake River Canyon from Star Valley is increasing about 4%/year, and the number coming over Teton Pass from Teton Valley is growing around 5%/year. What’s not growing that fast is our road system, nor other tools to handle more vehicles…
Yet Jackson Hole’s businesses are increasingly dependent on these increasingly crowded roads to deliver the growing numbers of out-of-county workers in the workforce. If one of those roads suddenly and catastrophically fails, it’s potentially devastating to any Jackson Hole businesses reliant on such workers.
Taxable Sales
The other problem with the timing of the Teton Pass collapse is how it affects the revenue taken in by the tourism industry and, by extension, local government.
Because Wyoming has no state income tax and a relatively low property tax rate, local government’s revenue is highly dependent on sales taxes. Specifically, sales taxes account for around 80% of the Town of Jackson general fund revenue, and around 50% of Teton County’s.
Over the past quarter-century, Teton County’s taxable sales economy has performed very well. Even including three downturns – one related to 9/11, a second to the Great Recession, and a third due to the COVID pandemic – for the past 26+ years taxable sales have nearly quadrupled, growing at a compounded average annual rate of 5.2%. (Take inflation into account, and they’ve doubled, growing 2.6%/year – Figure 4)
Over the past couple of years, though, growth has slowed to a rate not seen for over a decade. As a result, local merchants were hoping for a strong summer. In this, their optimism was buoyed by the fact that advance lodging bookings for summer 2024 were up 11%, suggesting a season of strong growth. Add in the fact that since the pandemic, hoteliers have been able to substantially raise their rates, and pre-slide Jackson Hole seemed poised for a much busier, more lucrative summer than it’s had since the pandemic.
This optimism took on even greater importance because, for most in the local tourism industry, summer is THE season. In particular, during a typical year the four summer months of June-September account for roughly half of all taxable sales. They also account for more tourism-related sales than the other eight months combined. Do well in the summer, and you’ve got a buffer to get you through the year. Do poorly, and unless you’re in the ski business, you’ll have a rough time catching up. (Figure 5)
Overnight, the slide not only undermined the Teton Pass road, but also the tourism industry’s good feelings about the coming summer.
Given this context, let’s take a closer look at the folks commuting into Jackson Hole to work.
Workers As Inputs
In 2020, the COVID-19 pandemic gave us a vivid snapshot of how closely linked the world’s economy has become. As transportation networks were increasingly disrupted, supply chains fell apart. As they did, manufacturers who had become hyper-efficient by relying on just-in-time delivery of essential parts found it increasingly difficult to produce their goods.
Applying this perspective to the Teton Pass slide, consider two simple facts: Jackson Hole has a service economy; and a service economy relies on employees. Put another way, what parts are to manufacturers, labor is to Jackson Hole’s service economy, particularly its tourism industry.
The closure of Teton Pass drives home the point that Jackson Hole’s service economy is also a just-in-time enterprise, relying on a remarkably efficient road-plus-vehicles transportation network to deliver its key component – employees – to their jobs at the start of the work day. In other words, just in time.
From this perspective, Teton Pass is at the heart of a quite sophisticated supply delivery system, one based on a remarkable piece of transportation engineering. Further, given the weather, steep slopes, and other hazards constantly threatening to close the road, it’s equally impressive that the Teton Pass road remains open as much as it does.
Last week’s closure shows, though, as sophisticated as the Teton Pass highway may be, it’s vulnerable to catastrophic failure. The same is true for Jackson Hole’s other major just-in-time delivery route, the Snake River Canyon, which experienced its own weeks-long closure over a decade ago thanks to a massive rock and mudslide.
Service businesses need people to deliver services, and Teton County, WY ranks in the top 1% of all US counties in its percentage of service and construction jobs. As a result, just as the global manufacturing industry experienced wild and far-reaching disruptions when it could no longer count on a particular widget reaching a particular factory just-in-time, so too does Jackson Hole’s economy experience wild and far-reaching disruptions when its workers can’t reach their jobs just-in-time.
Thus is the economic interdependence that creates Greater Jackson Hole, the one community spanning two states and three counties. And thus its vulnerability to two winding roads, both of which work great until they don’t.
Workers As Living, Breathing People
From an economics perspective, workers may be inputs necessary for producing services, but what really matters is that they are people with families, lives, ambitions, needs, wants, and so much more. People who chose to move to Teton Valley or Star Valley did so recognizing they would need to make a commute, and they planned their lives around it. What they did not plan on was that the commute would take hours longer each day. Today, thousands of people are struggling to cope with the consequences of that reality.
Currently an estimated 3,550 Teton Valley residents work in Jackson Hole. This represents roughly 30% of all Teton Valley residents, regardless of age or employment status. It also represents roughly half of Teton Valley’s entire workforce.
While each person affected by the commute has a different story to tell, we do know the following:
- Per Google Maps, under normal conditions driving from Victor to Jackson via Teton Pass takes 35 minutes to go 25 miles. Driving via the only other practical route into Jackson Hole – over Pine Creek Pass and then up the Snake River Canyon – takes 100 minutes to go 85 miles. This adds 120 miles and over two hours to the usual commute.
- For people with kids, pets, or responsibilities for other living things, this additional time and uncertainty can create an untenable situation.
- For all those commuting, the additional 120 miles/day will cost an extra $80/day (using the IRS mileage allowance of $0.67.mile). That’s $400/work week, which is 30% of the community’s median weekly wage.
- Before the slide, almost everyone commuting from Teton Valley to Jackson Hole drove their own cars. Since the slide, this hasn’t changed, and in fact seems to have gotten more acute – if you need to get home to grab your kid from child care or school, or to let your pet out, or do whatever, the appeal of driving your own vehicle outweighs the extra costs of gas and the like.
- It’s not just Teton Valley residents who have been affected. Before the Teton Pass slide, driving from Alpine to Jackson through the Snake River Canyon took about 40 minutes. Now, with an estimated 3,200+ more vehicles/day making the drive – a 130% increase on the baseline amount of traffic – it can take Star Valley residents up to ½ hour longer – one way – to make the same drive.
Then, of course, there’s the added anxiety, stress, uncertainty, and the rest being experienced by all those involved: commuters, their employers, and those who are indirectly affected as work patterns and lifestyles shift to accommodate the closure.
The Costs
A week ago, those Idahoans working in Jackson Hole planned on spending about 1.5 hours/day driving to and from their jobs. Today, those commuters – and very few Teton Valley workers carpool or take public transportation – are looking at a 3.8 hour roundtrip commute. At best.
The table in Figure 7 takes a few basic inputs – added drive time and mileage, foregone wages, number of workers, and commute cost per mile – and estimates the dollar value on that added burden. Specifically, as I calculate it, the slide is costing the typical Teton Valley commuter about $168/day in a combination of extra driving costs ($80/day) and foregone wages ($86/day). Multiply that $168/day by five working days, and the total cost is $840/week – for someone whose average weekly wage is only around $1,600.
Apply this figure to Teton ID’s entire 3,500-strong Jackson Hole workforce, and you get a collective cost of around $600,000/day – $3 million for every work week.
Apply the same methodology to Wyoming’s Star Valley, and the people living there are collectively losing another $100,000/day. This is due to longer commute times as several thousand more cars work their way from the Teton Valley to the Snake River Canyon, the only practical way into Jackson Hole for Idaho-based workers.
The new detour road around the Teton Pass slide will open by month’s end. Once it does, the extra costs facing Star Valley commuters will go away. They will also be greatly reduced for Teton Valley residents. Because the detour will likely result in a slower drive than was possible on the now-damaged road, though, there will still be added costs to those commuting into Jackson Hole from Teton Valley, which I estimate to be $30/day, or a collective total of $107,000/day for Teton Valley’s 3,550 daily commuters.
Comment
As noted above, Greater Jackson Hole is one community spanning two states and at least three counties. From sources across the planet, money – especially investment income – pours into the Jackson Hole valley. Then, like the air, water, critters, and other phenomena which don’t pay attention to political boundaries, some of that money flows into our neighboring communities.
Extending from this are two realities.
The first is economic interdependence. Somewhere around 40% of Jackson Hole’s jobs are held by people living outside the county; most living in either Teton Valley or Star Valley. As the Teton Pass slide has shown, when Jackson Hole is cut off from its neighboring counties, everyone suffers.
But not equally. That is the second reality: Economic dependence. For the simple fact is that, because Teton County, WY leads the nation in per capita investment income, it is much better insulated than the surrounding communities from the kinds of economic problems – much less shocks – that can affect local businesses and workers. As a result, metaphorically, while the slide caused Jackson Hole to catch a cold, Teton Valley has contracted a pretty severe case of the flu. As further result, for many Jackson Hole residents the income keeps rolling in regardless of local road conditions, job disruptions, or other economic misfortunes.
Bigger picture, the Teton Pass slide illuminates a larger problem, namely the potential events like this create for taking “ready, fire, aim” actions.
Particularly during an election year, the temptation will be strong to offer hurried, knee-jerk “solutions” to the many problems the slide has revealed. Yet many of the problems are so intertwined and multifaceted that they perfectly embody the HL Mencken observation that “For every complex problem, there is an answer that is clear, simple, and wrong.”
For example, between 2010-2022, the most recent year for which there are comparable data, pretty much every one of Greater Jackson Hole’s major socio-economic indicators grew faster than tourism counts:
- the region’s population grew 3 times faster than did Grand Teton National Park’s visitation;
- The number of jobs grew 10 times faster;
- per capita income – even after adjusted for inflation – grew 19 times faster. (Figure 6)
This suggests there’s far more going on in the region – economically, socially, and otherwise – than a simple “the slide is threatening our tourism economy” analysis suggests. Yet there is going to be a strong tendency not just jump to such conclusions, but act on them.
What the Teton Pass slide does suggest is that we need to take a hard look at Greater Jackson Hole’s trajectory. Do we know where we’re going? Do we like where we’re going? If not, what is the future we actually want?
In my ideal world, in the short run we’ll help those folks most directly affected by the slide. In the long run we’ll use the slide as the catalyst for asking important questions about the region’s future. If we can accomplish those two goals, then the great Teton Pass Slide of 2024 it will prove to be anything but a disaster.
