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What is Utah's real unemployment rate?

With no job growth, officials wonder what the truth is

Despite the 2001 recession and sluggish economic growth since, Utah's unemployment rate has stayed relatively low for the last few years.

But a new report from the Utah Foundation says that does not mean it has been easy to find work.

In fact, the report says, many Utahns have turned to self-employment or have dropped out of the labor force altogether, and that has kept jobless percentages low.

The foundation, a nonprofit, non-advocacy research organization, said in a press release Thursday that it conducted its study to discover why the state's unemployment rate has stayed at "a reasonable level" when no net new jobs were being created.

The average unemployment rate in 2000 for Utah was 3.2 percent. The rate in September of this year was 4.8 percent, according to the Utah Department of Workforce Services.

"It is remarkable that Utah's unemployment rate did not skyrocket during the recent recession, with strong population growth and a three-year period of no increase in jobs," said report author Richard Pak in a prepared statement. "The main reason it didn't is that many teens and college-age youth dropped out of the labor force — they quit looking for work."

The foundation report said workers appeared to be "waiting out" the downturn before seeking employment.

"Unemployment numbers only count those who are actively looking for work," the report said. "Hence, if someone stops looking for work, he or she is not considered part of the labor force. From 2000 to 2003, the working-age population increased from 1.53 million to 1.66 million, a growth of 8.7 percent. Meanwhile, the labor force grew only 3.9 percent."

Another factor keeping jobless rates low, the report said, may be an increase in the number of people working for themselves.

"Between 2000 and 2002, the number of Utah establishments with no employees (basically self-employed persons) saw unprecedented growth, increasing from 6,849 to 9,458, a 38.1 percent increase," the foundation report said. "In fact, the growth in Utah establishments with no employees accounted for 49.6 percent of the total growth in establishments of any size in 2001, and rose to an astonishing 82.7 percent of overall growth in 2002."

Those numbers fell dramatically in 2003 to less than 1 percent of total growth, "which may indicate that the job climate has begun to warm," the report said.

This week's Workforce Services report said the Utah economy has added 32,900 jobs since September 2003.

Also cited in the Utah Foundation report is the fact that, in 2003, Utahns were the third most likely population in the United States to hold multiple jobs. Federal statistics show that multiple job-holders accounted for 9 percent of the total employment in Utah, up from 7.8 percent in 2002. The national average was only 5.3 percent in 2002 and 2003.

"Utah's economy has struggled to meet workers' needs for over two decades," Utah Foundation executive director Steve Kroes said in a prepared statement. "Our wages have fallen behind national averages steadily since the early 1980s. Since 1996, Utah has led the nation in the growth in workers holding more than one job, probably because Utah jobs are not providing enough income for our families."

The Utah Foundation study was part of its "Utah Priorities Project," which started earlier this year with a survey showing that the state's voters ranked jobs and economic development as the second most important issue facing Utah. The entire report is available online at www.utahfoundation.org.


E-mail: gkratz@desnews.com