Recent unemployment statistics for Utah indicate continued improvement in this economic measure. The U.S. Department of Labor estimates Utah’s unemployment rate at the end of 2011 was approximately 6 percent. What this unemployment figure does not indicate is the decline in the measured workforce over the past several years.
Unemployment in Utah reached a recent cyclical high of 8.0 percent about two years ago in early 2010. During that period, the measured workforce in Utah totaled about 1.38 million, according to the Department of Labor.
At the end of 2011, the workforce in Utah totaled 1.34 million people. This represents a decrease of about 40,000 people in the reported workforce from early 2010 to late 2011. What is not captured in any of these statistics is the number of people in the workforce who would consider themselves underemployed. They may have a job, but are qualified for some sort of higher or more advanced employment.
Looking back over the past 10 years through the unemployment history in Utah, the last time the unemployment rate was as low as 6 percent was about three years ago in early 2009. At that time, unemployment was actually increasing from a cyclical low of 2.4 percent in early 2007.
In early 2009, the labor force in Utah was estimated at 1.39 million people. In early 2007, the Utah labor force was measured at 1.35 million people. Between early 2007 and early 2009, approximately 40,000 people entered the Utah labor pool. A stronger economy would seem to entice more workers to enter the workforce and seek employment.
As long as the economy stays relatively robust, new or returning workers can be absorbed into the workforce. If these new or returning people can’t find desirable employment, history would say some of them will stop seeking employment and wait until the economy provides more abundant or more desirable job opportunities.
Although there are some signs portions of the economy are beginning to improve, much more dynamic job growth is needed. Given the decline in the measured workforce in Utah over the last several years, it is apparent many have dropped out of the workforce. As the economy improves, many of those who have been on the employment sidelines will be drawn back into the workforce. This influx of potential workers will put pressure on the measured unemployment statistics and increase competition for jobs.
Kirby Brown is the CEO of Beneficial Financial Group in Salt Lake City.