PRESS RELEASE
October 21, 2004

Contact: Stephen Kroes, Executive Director
(801) 272-8824, ext. 5
(801) 573-8824 (mobile)
steve@utahfoundation.org

Tough Economy Caused Many Utahns to Drop Out of Workforce

Utah Foundation today released its October Research Report examining Utah’s workforce and how the recent years of recession and slow recovery have affected Utahns. This report is part of the Utah Priorities Project, which began earlier this year with a survey showing Utah voters ranked jobs and economic development as the second most important issue facing this state (details of the survey are online at www.utahpriorities.net). The Executive Summary and the full version of the October report are available at: www.utahfoundation.org/reports.html.

A primary reason for performing this research was to discover why Utah’s unemployment rate stayed at a reasonable level during the past several years when no net new jobs were created. The report found that:

• Many Utahns appear to have dropped out of the labor force in the three years from 2000 to 2003, giving up on finding work.
• Many Utahns became self employed and aren't showing up on official data on the number of jobs in the state.
• Young workers (teens and college students) were hit by the recession much worse than older workers, and Utah has a traditionally high rate of teen employment. These young workers dropped out of the labor force in larger numbers than other age groups.

Additional findings of the report include:

• The rate of Utahns holding multiple jobs rose quite a bit more than other states from 2000 to 2003, when employment conditions were the worst for Utah.
• The economy is turning around this year, however, with about 25,000 private sector jobs being created in the past year.
• An individual’s level of education strongly influences his or her likelihood of unemployment. In 2003, Utahns who did not complete high school experienced a 9.2% unemployment rate. Those who finished high school cut their unemployment prospects in half, with a 4.2% unemployment rate. Those who hold a bachelor’s degree or higher cut their unemployment prospects in half again, with a 2.1% unemployment rate.

Report author Richard Pak said, “It is remarkable that Utah’s unemployment rate did not skyrocket during the recent recession, with strong population growth and a three year period of no increase in jobs. The main reason it didn’t is that many teens and college-age youth dropped out of the labor force – they quit looking for work. Another reason is that more Utahns became self employed.”

Looking at the longer term, Steve Kroes, Utah Foundation Executive Director said, “Utah’s economy has struggled to meet workers needs for over two decades. Our wages have fallen behind national averages steadily since the early 1980s. Since 1996, Utah has led the nation in the growth in workers holding more than one job, probably because Utah jobs are not providing enough income for our families.”

Utah Foundation is a nonprofit, non-advocacy research organization. Our mission is to encourage informed public policy making and to serve as Utah's trusted source for independent, objective research on crucial public policy issues. Learn more and view research reports at www.utahfoundation.org.

# # #