Utah Department of Workforce Services predicts job growth through 2020
SALT LAKE CITY — Utah will add thousands of new jobs over the next six years, according to a report released Monday.
Occupational projections from the Utah Department of Workforce Services estimate the state economy will add 307,850 jobs between 2010 and 2020, growing total employment to 1.6 million jobs — a 2.2 percent compound annual rate.
Many of those jobs, however, are expected to be in low-paying industries such as retail sales, customer service and food services.
The projection period follows the Great Recession, an era characterized by declining employment statewide, explained report co-author and DWS research economist Natalie Torosyan.
Average annual employment between 1990 and 2010 grew at a rate of 2.7 percent, Torosyan said, and before the employment decline of 2008, annual employment grew by 3.3 percent. From the prerecession employment peak to the lowest point, more than 70,000 jobs were lost — or one out of every 20, she said.
“The majority of losses were in the manufacturing and construction industries,” Torosyan said. “Employment growth, which was slowed by the recession, has since accelerated, and by 2020 net job losses from the recession are expected to be fully recovered.”
Almost 20 percent of employment added between 2010 and 2020 will be a recovery of jobs lost in the recession, and the remaining share will be growth beyond recovery, she added.
“We are going to be growing out of the recession,” Torosyan said. “We expect that the number of jobs that will be added over the 10 years will make up for the losses and then some.”
Of the new jobs created over the 10-year period, more than 80 percent will be new positions that had not existed before the economic downturn, she said. The data that the projections are based on does not distinguish between part- or full-time employment, Torosyan noted.
Job openings are derived from growth in the number of new jobs added due to industry expansion and replacement needs created when workers permanently leave an occupation for a variety of reasons, including career change, promotion, retirement or exiting from the labor force, Torosyan explained.
Growth and replacement openings each will make up about half of the forecasted total openings between 2010 and 2020, the report stated.
All major occupational groups are expected to add job openings, though growth in farming, fishing and forestry occupations will be unremarkable and unable to prevent employment in the occupation from contracting, Torosyan said.
Occupations such as retail sales, customer service and food service workers are expected to see the largest numeric increases, while biomedical engineers, entry-level construction workers and personal care aides are predicted to be among the fastest growing occupations.
Torosyan said job growth in Utah is expected to grow at 2.2 percent per year through 2020, compared with 1.3 percent for the rest of the nation.
Entry into more than 70 percent of openings through 2020 will be associated with educational attainment of a high school diploma or less, she explained. Expectedly, many of those openings will be for occupations that pay the lowest wages.
“Four of the 10 fastest-growing occupations typically employ entry-level workers with education equivalent to a high school diploma or less," Torosyan added. "Despite relatively low education standards, fast-growing occupations will tend to pay wages that are higher than the median for all occupations.”
The 10 fastest-growing occupations pay a median annual wage of $38,880, she noted.
Occupations are categorized into 22 major groups. Within the major computer and mathematical occupations, the median annual wage for management occupations is $80,640. The median annual wage for architecture and engineering occupations with entry-level education is $67,870.
Conversely, the lowest wages paid for occupations are in food preparation and serving-related occupations, with a median wage of $18,700 annually.
Meanwhile, one irony of a vibrant economy such as Utah’s is the increase in job churning, explained report co-author and DWS supervising economist Mark Knold.
“Job churning” is defined as the amount of hiring and separations from jobs — or turnover.
Before the Great Recession unfolded in late 2008, the amount of hiring and separations from jobs in Utah was brisk, roughly 110,000 hires or job separations during each quarter, Knold said.
“The volume is rarely equal as the hires tend to outpace separations in an expanding economy and vice versa, but there was a high volume of both during this time period,” he said. “When the Great Recession hit, the volume of churning slowed noticeably, falling to roughly 75,000 — or by approximately one-third.”
New jobs were not being created, causing the workforce to stay in the jobs they were fortunate enough to have, he said.
The Utah job market’s growth rates increased in late 2012 and through most of 2013, so the current churning is expected to be even higher into 2014, Knold said.
“In an improving economy, fewer people feel compelled to stay in their current jobs because the increase in job opportunities offers the potential to find an improvement,” he said. “In an ironic way, more job churning points to a more vibrant economy.”