Utah wage growth soars

Kids can do some crazy things with math. And they just did a number — as they always do — on Utah's per capita income figures, released by a federal agency on Tuesday.

Utah's unique demographics — large households and younger wage-earners — skewed the 2006 figures and can relieve any Utahns worried about the state cozying up in the rankings with the likes of Kentucky, Arkansas, West Virginia and Mississippi.

On the plus side of preliminary estimates released by the U.S. Bureau of Economic Analysis was Utah's ranking of fourth-highest among states in per capita income growth in 2006, which was 6.5 percent above the 2005 level.

But Utah's per capita personal income was $29,108 last year, putting it 47th among states.

"The best thing about those numbers are the fact that our growth was almost the highest in the country, which means we're having a lot of wage growth going on in relation to the rest of the country," said Mark Knold, senior economist at the Utah Department of Workforce Services. "It's just a complete reflection of our booming economy, and hopefully we can be in that same position next year."

As one of the best economies in the country for nearly two years, Utah features a low unemployment rate. That tight labor market translates into aggressive wage growth because employers need to be aggressive in bidding for workers, he said.

As for the 47th-place ranking, "we will always be low," Knold said.

"It's a combination of a couple of factors," he said. "On the surface, it just looks like we don't make any money, or everybody else makes more money than we do. But you have to understand how that is calculated. It's all the money generated in the state divided by all the people, including kids. There's the key. ... We have more kids than everybody else, and thus fewer wage earners per capita than any other state."

For example, a family with two parents and two children would have a higher per capita personal income than one with two parents and four children if both families earned the same total.

What's more, he said, the national labor force is dominated by baby boomers in the peak earnings period of their lifetimes because of tenure and work experience, but Utah's labor force is younger. Forty-seven percent of Utah's workers are age 35 and younger, "and no other state breaks 40 percent in that respect," Knold said.

The combination of large families and younger workers "can't do anything but put us near the bottom of the list," he said. "It would take San Francisco wages to push us up that per capita scale.