Utah jobs: No gain, more pain as unemployment tops 5 percent

Utah jobs: No gain, more pain as unemployment tops 5 percent
Others have taken part time work, or jobs with less pay

By Lesley Mitchell, The Salt Lake Tribune
Updated: 03/25/2009 08:33:51 AM MDT

Utah's economy has lost about 26,000 jobs in the past year, pushing unemployment to more than 5 percent for the first time in four years, a new report shows.

But numbers don't tell the whole story.

Some Utahns laid off from jobs have found others, but at half the pay or at reduced hours, meaning that "there's a lot of 'silent pain' in the economy right now that the unemployment rate doesn't measure," said Mark Knold, chief economist for the Utah Department of Workforce Services.

Make no mistake, the numbers are sobering enough. The share of Utahns without jobs, rose to 5.1 percent in February, up from 4.1 percent just two months before, at the end of 2008. Only twice since Utah has been keeping employment data -- both times during the downturn of 1982 -- has the state's unemployment rate jumped by 1 percentage point over just a two-month period.

The report released Tuesday shows that key aspects of Utah's economy are deteriorating rapidly, and that the current slump will be one for the history books.

"This will turn out to the state's worst downturn since the Great Depression," Knold said.

About 70,400 people were considered unemployed in February 2009, compared with 45,000 in the same month last year. Utah's rate is still well below the national average of 8.1 percent, but the state clearly is not immune to the impacts of the U.S. recession.

The state's downward spin began in mid-2007 in residential real estate with a sharp fall in home sales. But what began as a real estate-oriented downturn with layoffs at home builders, real estate brokerages and title companies, has expanded to many different sectors of the economy.

That makes it difficult for many who have lost jobs to find new ones, let alone for similar pay. Veteran Utah residential appraiser Kevin Ethington lost his job at Wachovia over the holidays, one of about 100 Utah loan officers, appraisers and office staff working in Utah for the ailing financial services giant, before it was absorbed by Wells Fargo & Co.

Ethington said he has been unable to find another staff appraisal job, so he tapped his 401(k), which had lost 40 percent of its value in the stock market meltdown, and recently started his own appraisal business. He's making half his former income.

Knold said Ethington's situation illustrates the state's "silent pain."

"You have people who can't find a job that pays as well as the one they lost, or someone who was working full time and can find only part-time work, or someone who has had their hours cut. You have others who are furloughed -- technically they are still employed but they aren't getting paid for a week."

Linda Hilton of the Crossroads Urban Center, an advocacy group for low-income Utahns, is witnessing the same phenomenon.

"I've seen people who have been construction, and now they are selling hardware at Home Depot and they are not making anything close to what they were making before," she said.

How bad might all of this get? Will Utah's unemployment rate get close to the peak of 9.7 percent reached in 1983? Not likely, Knold said, adding that he expects a high in the 7 percent range.

Another key barometer is year-over-year job growth. In the year that ended in February, Utah lost 2.1 percent of its job base because of layoffs and companies forgoing expansions, bringing total employment down to 1.2 million. In a thriving economy, Utah gains, not loses, jobs on a year-over-year basis.

For the time being, job losses are continuing to accelerate and more families like the Denneys of Salt Lake City find themselves coping with the unexpected shock of a layoff.

Earlier this month, James Denney, a father of five children ages 5 weeks to 6 years, was assured his job at a shipping company was safe. On Tuesday, he found himself in a state office filling for unemployment benefits and reviewing help-wanted listings.

"We're looking for any type of job right now," said his wife, Victoria, who works part time.

Knold of Workforce Services said he's closely monitoring jobs numbers in Utah for any sign of improvement but hasn't found much encouraging data. "It will get worse before it gets better. This is the deep and bad part of the downturn."

lesley@sltrib.com