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Stacie Scott, KSL, File

Help wanted: Utah is facing a major worker shortage, report says

By Jasen Lee, KSL | Posted - Jan 14th, 2020 @ 4:47pm



SALT LAKE CITY — Utah has more jobs available than it has people to fill them.

The U.S. Chamber of Commerce reported this week there are fewer than three workers for every four jobs in the Beehive State, the fifth-lowest ratio of job seekers to open positions in the United States. The data analysis revealed a historically tight labor market for employers that is creating an increasing hazard for the state’s long-term economic growth.

The report indicated there were an average of 81,333 jobs available per month in Utah during the 12-month period ending June 2019 — the latest month for which state-level data was available — with a monthly average of just 57,071 workers available to fill them. The state’s Worker Availability Ratio (available workers per open position) of 0.7 registered as the fifth-lowest in the country for the period. North Dakota registered the lowest at 0.51.

“It’s something that’s been quite a long time coming. Those of us who deal with labor market information know that our global market has been tight for several years,” said Lecia Langston, senior economist for the Utah Department of Workforce Services. “We have 2.4% unemployment, so we have a tight labor market, there’s just no getting around it at this point. We are in the second-lowest unemployment rate in the nation, and the highest job growth rate so things are going to combine and make it just pretty darn hard for employers to find workers.”

She noted that local employers are now trying to strike the balance of hiring the workers they need at a price they can afford to pay them.

“There’s an old adage among economists that there are no labor shortages, there are only wage shortages,” she said. “Employers don’t want to pay more wages and we don’t blame them because they’re trying to make profit and labor is their largest expense.”

Langston said the current market is definitely putting upward pressure on wages. But doing so would likely impact profitability and how many employees companies are willing to hire. One way to mitigate rising wages would be to hire more part-time workers, including luring those who may have been out of the market, she said.

“We have lots of folks out there who just aren’t looking for work right now. That’s when the employers can get a little bit creative by tapping into those groups,” she said. “Maybe by making your schedules work for stay-at-home parents or seniors who want to work, but don’t want to work full time.”

She said the state typically adds between 35,000 to 38,000 new positions annually across all employment sectors. She noted that sectors such as the construction trades, technology and professional services have been among the highest in need for more workers.

Meanwhile, the report also showed that Utah’s labor market is 14.2% tighter than it was this time last year and 85.2% tighter than 10 years ago.

“The data illuminate an important but overshadowed gap in the workforce,” said Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber of Commerce. “While much attention has rightfully been given to the skills gap — that is, that too many people lack the skills they need to compete for jobs in today’s economy — our nation also faces a growing people gap.”

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“In other words, there simply are too few workers to meet employer demand,” he said. “This lack of workers is holding back economic growth as it becomes harder for existing firms to meet demand and new businesses to open.”

Analysts concur that having available workers doesn’t always mean they are qualified for the open positions in their area.

“Available workers vary in terms of experience, skills and location, so they may not match the occupational, skill, location, and other needs associated with job openings,” said Ron Bird, senior economist for the U.S. Chamber of Commerce. “This ‘mismatch’ problem is magnified when the worker availability is low, posing a potentially significant barrier to hiring and growth for Utah businesses.”

Utah is not alone in dealing with the worker shortage challenge, the report stated. The national Worker Availability Ratio dropped to 0.88 available workers per open job in October, the most recent month with available data, which marked the lowest ratio in almost 20 years, according to a news release.

Data showed there were 7.63 million job openings nationwide last October compared to 6.74 million available workers.

“Employers attempting to fill open positions today are operating in a labor market that’s nearly three times tighter than it has been on average over the last 20 years and eight times tighter than it was a decade ago,” Bird said.

In Utah, Langston noted the last time the state’s unemployment rate was this low was right before the Great Recession. While she did not say Utah is heading in that direction again, there is evidence that the local economy is “a little overheated” and a bit of a slowdown could happen in the foreseeable future.

For now, qualified job seekers are in high demand, which bodes well for wages and job security, but not necessarily for those doing the hiring, she said.

“The labor market we have right now is great for people who need a job, but it’s not so great for employers trying to fill those jobs,” she said.

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