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It was the best of times; it was the worst of times.
Ok, it's probably more accurate to say, it is the "getting-better" of times and it is the "still pretty-bad" of times.
Utah's economy has been the envy of the nation through the worst of times and better times are within our grasp if we make the right decisions today.
Just take look at the economic performance of Utah compared to the United States from the beginning of the Great Recession and through the Grueling Recovery and you will see we are the envy of other states.
Of course, that doesn't mean Utahns haven't faced economic hardship. Far too many Utah families have lost jobs or lost their homes—or both—during the downturn. My heart goes out to them. For the purpose of this discussion, let's not focus the individual stories; let's stick to the big picture.
Since the recession hit in the summer of 2008 until it officially ended in June 2009, Utah has faced challenges along with the rest of the country. And just like the rest of the country we are still frustrated by the slow pace of the recovery. We'd all like to just put the whole mess behind us.
The light at the end of the tunnel is within our grasp. Not all states can say the same thing.
So what is our secret and why isn't everyone doing what Utah is doing? Those are the multi-million dollar questions.
Unemployment and growth
The numbers clearly show a distinction between the Utah economy and the rest of the nation. In the Beehive State, the unemployment rate has now dropped to just six percent compared to 8.5 percent nationally. Only eight states boast unemployment rates lower than Utah.
Unemployment numbers can be misleading. The rate is calculated by the number of people out of work but actively looking for a job. Frustrated workers—those who have simply given up looking for work—are not factored in. In other words, the unemployment rate can drop without adding any new jobs—just adding frustrated workers. Conversely, it can temporarily be a positive sign when the unemployment rate rises because it indicates more people are optimistic enough to look for work.
It's a statistic that can either be a great way to keep score… or it can be like deciding the winner based solely on free throw percentage.
Utah has added over 30,000 net jobs in the past 12 months. Even more telling is Utah's rate of economic growth of three percent— that's 2.3 times higher than the national figure.
In Utah's case, a decreasing unemployment rate has been an accurate barometer. We have added over 30,000 net jobs in the past 12 months. Even more telling is our rate of economic growth of three percent—that's 2.3 times higher than the national figure.
Utah weathered the recent economic storm (actually more of a tsunami) better than the rest of the nation, in part, because of our diversified economy. Gone are the days when this was nothing more than a mining state, overly dependent on agriculture. Both are still important sectors of our economy, but today Utah has a thriving high-tech sector with businesses like Adobe, L-3 Communications, Overstock.com and eBay. We're home to the second largest Goldman Sachs office in the Americas—and the most requested by Goldman Sachs employees. The Greatest Snow on Earth, five national parks and the home of a world religion, make tourism one of our strengths, as well. A diversified economy protects from industry-specific bubbles and promotes sustained growth.
Smart planning
Our decision to be an ant and not a grasshopper during times of plenty also shielded us from the full brunt of the recession. With a Rainy Day Fund around $500 million, the governor and Legislature were able to bridge unexpected funding gaps and make minor cuts when other states had to take a machete to their budgets. The state also protects its Triple-A credit rating to keep bonding costs low.
Utah's advantages
With our fiscal house in order, we have been luring businesses from surrounding states, with California being a particularly fertile field. This success comes largely from cultivating a business-friendly climate. Generally speaking, we don't overburden business with needless regulations and other things businesses love, like lower taxes, some of the lowest energy rates in the nation and a young, well-educated, highly bilingual workforce, are plentiful here. We've also invested heavily in mobility infrastructure so moving people and goods through our state is efficient. These all factor into our efforts to grow local businesses, keep them here when it is time for them to expand and draw businesses (and jobs) from our competition.
Make no mistake about it; Utah is in direct competition with the other 49 states in the union and our global peers when it comes to attracting businesses. And we're pretty darn good at it.
Make no mistake about it; Utah is in direct competition with the other 49 states in the union and our global peers when it comes to attracting businesses. And we're pretty darn good at it. The combined efforts of the Economic Development Corp. of Utah, the Governor's Office of Economic Development, World Trade Center Utah and the Salt Lake Chamber have helped bring thousands of jobs to our state.
Building on momentum
Utah's economy is gaining steam and now is the time to build on our momentum. We must continue to invest in our mobility infrastructure to accommodate our growth and to keep commerce free from gridlock.
We need to invest and innovate in the development of our workforce. You'll likely hear a lot about education over the next few weeks as the Legislature works out the details of the state budget. Business organizations have made it a top priority because they need the workforce to grow and to build enduring prosperity.
Kids grow up fast and the effort we put into educating them today will determine if they become the next generation of highly sought-after workers and leaders or if the businesses that have come here for those workers, are forced to look elsewhere.
And we need to continuously work to make it easy for businesses to come to Utah, to start in Utah and to grow in Utah.
