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New report says Utah’s boom years were a bust for working families

SHARE New report says Utah’s boom years were a bust for working families

Utah's economic boom was kind of a bust for work-a-day parents and their children, a new study by the state's largest child welfare advocacy and research group found.

Voices for Utah Children's "State of Working Utah, 2008: Looking Back on the Boom," reports that if the rapid population growth during the economic good times between 2000 and 2007 is factored in, Utah's gross product grew, but grew slower than the national average.

While the state was enjoying its highest inflation-adjusted median hourly wage since 1979 during that eight-year period, the state's median household income actually fell, according to the report.

Even though wages increased slightly for nearly all employees — low-income workers included—household incomes don't reflect the prosperity of the general economy during those years, said Allison Rowland, the group's research director and author of the report.

The picture is complex, and the paradox could be explained in part by the labor market environment at the time, such as the the construction sector's "last-hired, first-fired" employee management approach, Rowland said. The practice, as far as a statistical reckoning, would result in apparent gains, even if actual wages for employed workers went unchanged over all, she said.

However the boom is calibrated or parsed, the boom didn't affect workers equally, the report states. Perhaps the clearest inequity indicator is the fact that Utah's rate of child poverty grew by more than 30 percent between 2000 and 2007, or a total poverty rate of 13 percent.

In effect, the good times weren't all that good for low-wage families, which in turn makes the tough times now tougher on them, Rowland said. Take factors such as home values hitting bottom along with ever-increasing cost of health care plus the bumps in the price of fuel, food and utilities, the only thing going up for these families in particular and working Utah families in general is the level of financial stress, she added.

Add the worsening global economy and the lack of any substantial gains for households during the most recent business cycle, and financial cushions are suddenly not much to fall back on, she said.

As with the wider economy, when consumers don't or can't consume at the rate the economy is accustomed to, "the primary concern for Utah policymakers should be helping families maintain or recover their spending power," she said, noting that the livelihood of area businesses, not just families, depend on it.

Now is no time for government to cut back spending on goods and services, she said, citing Nobel Prize-winning economist Joseph Stiglitz and Peter Orzag, director of the Congressional Budget Office, who argue that reducing supplements and services to lower-income families during a recession inflicts deeper financial ripples that are particularly damaging to local economies.

Rowland's report is based on figures from the Economic Policy Institute and a series of national survey findings from the U.S. Census Bureau.

A complete copy of the report is available at www.utahchildren.org.

E-mail: jthalman@desnews.com