BUSINESS

Utah labor shortage: Why employees are quitting and where they’re going

Oct 18, 2021, 8:33 PM | Updated: 11:57 pm
utah labor shortage...
FILE: Image of the Utah Department of Workforce Services building in Salt Lake City, pictured on Thursday, April 2, 2020. Photo credit: Steve Griffin, Deseret News

SALT LAKE CITY — The U.S. Bureau of Labor Statistics said millions of workers quit their jobs in August of 2021 which has added tremendously to a Utah labor shortage.  They call it “the great resignation,” and the highest monthly resignation total in almost 21 years.

What is behind the great resignation, and where are those workers going? Economists in Utah say there are many possible answers and that, at least in this state, a competitive job market creating chances for people to branch out and find better opportunities.

Don’t blame Utah labor shortage on enhanced unemployment

Analysts say enhanced employment benefits during the pandemic may have made it more enticing for people to stay home and avoid working.  Even though those enhanced benefits ended earlier this year, economists say there are other reasons why the state is seeing such a big labor shortage.  Department of Workforce Services Senior Economist Michael Jeanfreau says even if every unemployed Utahn were to get a job today, thousands of jobs would go unfilled.

Related: Ending unemployment benefit early to fill jobs didn’t work, says state rep

Jeanfreau says, “Last time I looked at the numbers, it was something like we’d be shy over 150 thousand jobs that wouldn’t be filled.”

Do look at baby boomers, and others leaving the workforce entirely

Across the country, baby boomers are retiring and leaving the workforce completely.  Jeanfreau says that isn’t as big of a factor in Utah as it is in other states, but, he says teens aren’t entering the workforce as strongly as before.

“We’ve seen a huge drop in 16-18 year-olds participating, and people are more likely to live with their parents.  So, again, they’re less likely to get jobs,” he says.

To ease a Utah labor shortage, companies must adapt

The formula for finding workers may seem simple enough.  Jeanfreau says the companies that are more successful in finding new employees are offering their recruits flexible schedules with higher pay.  Essentially, the “grass is greener” at these businesses.  He says the wages for workers in traditionally low-paying jobs have been steadily climbing as businesses try to find qualified candidates.

Related: Utah unemployment rate among lowest in the nation

“The lowest percentiles, like the 25th percentile earners have totally tightened up to the 50 percent earners.  So, you see the low end starting to catch up to the average,” Jeanfreau says.

Plus, he says it’s easier for people in the lower percentiles to find jobs that match their skill levels, even if they leave the industry they’re currently in.  For instance, he says workers who are frustrated with the restaurant industry can easily find work in hospitality.

He says, “You’re not necessarily going to have skill or education barriers between them.”

Jeanfreau says the economy will “balance” itself out over the next 12 months, and he believes industries that are struggling to find workers, now, won’t be struggling as much next year.

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