Utah incentives for high-paying jobs at issue

State officials are trying to make sure that the high-paying jobs created by companies receiving economic development incentives are, indeed, high-paying.

The Senate Workforce Services and Community and Economic Development Committee on Tuesday passed out SB249, which calls for incentivized companies to pay at a level to "compare favorably against the average wage of a community in which the jobs will exist."

Current law calls for use of the median rather than the average. The Governor's Office of Economic Development Board, which awards the incentives, typically has required recipient companies to pay at least 25 percent higher than the county median.

Jason Perry, GOED's executive director, told the committee that medians are determined through the use of a complex formula and that using averages would be in line with other state agencies' activities. Also, averages would be updated quarterly.

Refining the definition of "high-paying jobs" was discussed at length during a GOED Board meeting Friday. Michael Nelson, in charge of corporate recruitment and incentives for GOED, said averages are the "most appropriate for us to use" and would result in a "much stronger, much higher wage number" as the threshold for incentives.

Board Chairman David Simmons said using averages would revert to a criterion used in the late 1980s. He said average wages typically are 20 percent to 25 percent above medians, but he and others cited examples where certain employers — Nucor, mining operators or military contractors — pay at levels "substantially higher" than the remainder of the county. Paying 25 percent above the median there would mean "we're barely at the average wage in some of these counties," he said.

"You almost have to get it down to the community, not just the county," board member Mark Howell said.

Other board members suggested low-wage jobs in some areas would be welcome if they provided health and other benefits or provided training or added skills that make employees more employable. They also said Utah needs to try to close the gap between U.S. average pay and Utah's average.

Gerald Sherratt, a GOED board member who also is Cedar City's mayor, said "you need to focus on jobs that help the human condition."

And while the "average" versus "median" choice dominated the discussion, board members acknowledged that the key words in the law were "compare favorably." That, they said, provides the board with discretion and flexibility.

Board member Jack Brittain said either average or median pay would be "high-paying."