As of July, Logan city has the lowest unemployment rate by metro area in the nation, recorded by The United State Bureau of Labor Statistics. Low unemployment rates can cause issues for the economy and business growth — especially for Cache Valley.
The Logan metro area’s unemployment rate currently sits at 1.8%, the lowest in the entire nation, compared to the nation’s rate of 5.2%. Utah’s unemployment rate is 2.7%, so it is safe to say the state is doing well. The state’s statistics page claims 44,200 people are currently unemployed in the state. While that sounds great in theory, low unemployment means a lack of labor for vacant jobs and lower incentive for businesses to come to the state.
Josh Smith, a research manager at USU’s Center for Growth and Opportunity, specializes in immigration issues. He said the labor shortage across the United States was “definitely related” to COVID-19.
“There are people who are nervous about going back to work, people who lost their jobs— so that’s 100% part of the story,” he said.
Smith also mentioned that Jason Furman, an economic adviser for President Barack Obama, conducted research that found early on, federal unemployment benefits contributed to the labor shortage — although Cache County had the lowest unemployment in the nation at the beginning of the pandemic, as well. Another issue was child care. As schools and day cares began to shut down, parents were forced to stay home with their children.
Back in May, Gov. Spencer Cox pushed to end federal unemployment benefits and told CNN that despite Utah’s low unemployment numbers, labor shortages occurred when “we pay people not to work.”
Cox chose to end benefits back in June, with final payments going out the first week of July.
“There is some reason to think that people are renegotiating their work lives,” Smith said. “Someone might be saying, ‘Do I really want to work in steel?’ There’s some soul searching at that point.”
For Cache Valley in particular, Smith stated that the major issue contributing to a labor shortage outside of COVID-19 is housing, because it is hard to attract work when there is nowhere for new workers to live.
“Housing prices have risen a ton, but there are lots of things cities can do,” Smith said. He added that the Logan Municipal Council’s recent approval of accessory dwelling units would help bring work to the valley. Smith would also recommend changing single-family zoning to allow more duplexes and townhomes.
Shawn Milne, Cache Valley Regional Economic Development Director, gave his own opinions on contributions to the county’s labor shortages. He said there are two ends of the spectrum — the “boys in the basement,” or young adults who aren’t working, and senior citizens who decided to retire early when the pandemic hit.
“There are a lot of 20-somethings that have the privilege of not needing to work while being a full-time student,” Milne said. “We feel as though some of it can be contributed to the pandemic response and federal stimulus money. Some of it can genuinely be attributed to people being concerned about their health. But it seems there’s also this cultural shift. We want to provide better opportunities for our own offspring than what we had to do. We’ve disincentivized working at an early age.”
In addition to incentivizing young adults to work, Milne and his team needed to figure out how to get older people back into the workforce who sat out due to poor health or the chances of falling ill. The biggest issue would be getting people back to work without hurting the businesses in the process, he said.
Milne’s advice to businesses was to provide more flexibility when scheduling so parents could work earlier in the day or later depending on their family’s schedule.
“Sure, wages are a big part of it, but so is accommodating one’s lifestyle,” he said.
Smith offered his own advice: “The big thing that businesses can do to attract workers, they are already doing. That’s raising wages, providing signing bonuses. Wage increases are definitely how you start to entice workers back in.”
Additionally, Smith said allowing more immigrants into the country and Utah in general would provide the labor needed.
At the state level, Lt. Gov. Deidre Henderson started up a program titled “Return to Utah” to encourage Utahns to return to work. According to the website, the positions provide “experience, training, skills, and mentoring an individual needs to return to the workforce without starting from the bottom of the career ladder.” The “returnships” will typically last up to 16 weeks.
Businesses across the country are lowering requirements to increase employment. Amazon announced that past employees fired or barred during marijuana screenings could now be hired back.