In a recent Market Snapshot newsletter, Zions Bank economic and public policy officer Robert Spendlove pointed out a threat to economic growth in Utah and the nation:
“It has been nearly eight years since the end of the Great Recession and many businesses in the United States are still struggling to grow, but this time for a different reason — a lack of qualified workers. There is a growing divide between the number of job openings and the number of qualified workers to fill them.”
This increasing labor shortage in Utah and across the nation can be an important opportunity for Utah — or it can be a major crisis.
It can be a real opportunity because Utah has a plethora of young people — an upcoming workforce — expanding at a faster rate than anywhere in the nation. With a young, growing population, Utah can be a very attractive place for businesses to expand and relocate.
Another reason the labor shortage can be an opportunity is that Utah has historically been a welcoming place for immigrants, and immigration is a very important source for good employees.
But these attractive opportunities will not come to fruition if Utah’s young people are not properly prepared for the jobs that will exist in the new economy, and if immigration policies are so restrictive that this important labor source dries up.
As the economy strengthens in Utah and nationwide, it’s obvious that finding qualified workers will be a key to business success.
Spendlove wrote: “The labor pool from which employers can draw new talent is shrinking in tandem with the unemployment rate. In 2009, there were approximately 6.6 unemployed persons for every job opening, now there are 1.3. As the labor gap persists, businesses are forced to scale back on projects, increase wages, or relocate to more advantageous regions. In the construction industry, a shortage of workers has become a major driver in the delay of new construction and rising home prices.”
Utah is poised for a bright economic future. But a lack of qualified workers could slow our progress. Conversely, if our workforce is well-prepared and growing, a strong Utah economy can be assured.
The worst possible scenario would be to have a growing young population that is not prepared for the good jobs of the future. While low-skill starting jobs help teens and college students learn to work and be dependable, those jobs won’t support a family and won’t make a satisfying career. And many of those low-skill jobs are going to be automated in the future. They will simply no longer exist.
Therefore, it is imperative that every young person from every segment of society be prepared for a good job. Four-year college degrees are not needed in many cases. Many of the jobs available today that aren’t being filled for lack of qualified workers need specialized, technical training — but not college degrees.
This sort of training is the best way to break the cycle of poverty in low-income families. We have an enormous resource in young people. But many of them face a bleak future if they aren’t prepared for good jobs.
A welcoming immigration environment can also help ease the labor shortage. Numerous studies have shown that immigrants make positive contributions to the workforce.
Preparing our young people will require a large investment. We cannot accomplish it while spending the least amount per-pupil in the country. That’s why the Our Schools Now initiative (which I co-chair with other community leaders) is so important. It will provide the resources needed so every student can succeed.
This opportunity (or potential crisis) demands a great sense of urgency from Utah policymakers. This needs to be Utah’s moonshot. If we do this right, we can ensure a bright economic future for Utah. As the nationwide labor shortage grows more serious, Utah will enjoy a significant competitive advantage as employers view our state as a place where they can find great employees.
A. Scott Anderson is CEO and president of Zions Bank.