Higher-paying jobs do a vanishing act in Utah

Utah's higher-paying jobs are disappearing as lower-paying, service sector jobs fill the void, according to a new report.

Ever since the last national recession hit in March 2001, Utah's job losses have disproportionately occurred among higher wage jobs, according to James Wood, director of the University of Utah's Bureau of Economic and Business Research.

"Of the nine major employment sectors that have suffered significant job losses, eight have an average wage rate above $30,120," the report said. "The reverse is true for the sectors that recorded job growth — four of the seven growth sectors have average wage rates below $30,120."

Utah's average wage rate over the past two years was $30,120.

From 2001 through 2003, job losses in the manufacturing sector, with an average annual salary of $36,816, led all sectors in the number of jobs lost at more than 10,000 positions. Those losses were somewhat offset by job gains in education and health services, which added more than 8,500 jobs, but with an average annual salary of $27,540.

"It's fairly obvious at first blush if you're losing manufacturing jobs and gaining service sector or retail jobs the wage rates are probably not equivalent," said Kelly Matthews, executive vice president and economist for Wells Fargo. "Some of those kind of jobs are simply going to be located in India or China. We're probably not in a position to actually compete with those."

Wood says there is a strong possibility that a "low-wage" recovery is following the state's "high-wage" recession.

"The immediate and long-term challenge is to create jobs with near equivalent wages to those lost in the state's high-tech and steel industries," the report said. "Since July 2003 the year-over growth has remained in positive territory, although Utah is one of 30 states with fewer jobs now than when the recession officially ended in November 2001."

Utah has enjoyed six consecutive months of positive employment growth. Employment forecasts for 2004 place the state's job growth at 1 percent to 2 percent, or between 11,000 and 19,300 new jobs.

The continuing bright spot in Utah's economy is real estate sales. Last year along the Wasatch Front there were 21,530 sales of existing homes, the U. report said, creating demand for 12,000 new homes built in Davis, Salt Lake, Utah and Weber counties. About 80 percent of new homebuyers are households already in Utah.