Right On: Show me the money; Southern Utah’s economic prospects

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OPINION – Show me the money! If Utah’s economy is doing so well, why aren’t paychecks climbing here in Southern Utah?

The answer in short form: They aren’t climbing much nationally and due to our location and our demographics, what we see now is what we are likely to get. Here’s why.

Utah was rated the top state for business in 2016 by CNBC. Utah was ranked in the Top 10 best states to make a living in 2015 by AOL. Utah has been ranked first in economic competitiveness multiple times in recent years by the American Legislative Exchange Council.

Utah has more Top 10 economic rankings than any other state.

Our state economy is well balanced with strong tourism, farming, and mining industries, and in recent years, a growing high-tech sector. Household names like Google, Adobe, Intel/Micron, eBay, Boeing and a variety of medical technology companies have located here. Dare I add the National Security Agency?

The New Yorker magazine notes that in Utah, companies aren’t concentrated in one particular sector — the state’s super-sector employment comes largely from software businesses but also from medical-device manufacturers and makers of aerospace products, among others.

Utah’s state government fiscal condition is ranked seventh best in the country. State pension obligations are fully funded and the state has a large rainy day fund.

Utah was the fastest growing state in the country in 2016 with 43 percent of that growth from net in-migration. Yet public private partnership Envision Utah put in place a nationally recognized regional planning process that is making significant progress in managing this growth.

Utahns can take pride in the fact that our state is no longer an isolated economic backwater.

So what’s not to like? Almost all this good news is focused on the Wasatch front. Like many states with prosperous metropolitan areas, other parts of the state can feel left behind.

The good news for Southern Utah: While we don’t have the Wasatch front’s economy, we are not a backwater either. Our economy has been growing well above both the national and Utah averages for several years. Often overlooked, our cost of living is significantly lower than places like Salt Lake, Las Vegas and California.

Our unemployment rate is 3.2 percent. If you want a job, you can get a job, although maybe not the one you want.

Why not? Our economy is based on retirees, tourism and leisure. Missing are the manufacturing and technical companies prevalent on the Wasatch front.

Retirees and tourists bring with them a disproportionately higher demand for housing, retail stores and restaurants as well as health and other professional services. This contrast is easily seen by comparing economic snapshots of Washington County with Provo’s Utah County.

Data from the federal Bureau of Labor Statistics shows that construction and professional services are relatively higher paying industries. Retail trade, hospitality and leisure services are by far the lowest.

With our large retiree population, higher paying health services jobs should remain plentiful.

Southern Utah builders today are scrambling to find enough employees for their higher paying, blue collar jobs. This demand is fueling both in-migration and selectively higher wages. But these jobs become scarce when growth slows as it did in 2009.

The number of retail trade and hospitality jobs is increasing with our population. But these are fields with relative ease of entry. Labor shortages in these fields are unlikely and wages will remain modest for the most part.

In my opinion, there are two keys that will influence our economy in coming years, one controversial and one highly uncertain.

First, the controversial: Today’s level of residential and commercial construction jobs depends on continuing population growth. In the long term, Southern Utah population growth depends on building the Lake Powell pipeline. But the pipeline is controversial because of its cost, uncertainty about Lake Powell water levels and opposition to the population growth that water would bring. This writer opposes the pipeline, the topic of a future column.

Second, the uncertain: Eric Pedersen is Dixie State University’s Dean of Science and Technology and an active tech entrepreneur. Referring to Southern Utah, he said “We suck at technology. I believe we have a $2 billion opportunity that is barely being addressed.”

Significantly expanding high tech employment in Southern Utah is uncertain. Dixie graduates only 40 computer science majors per year and only 550 are graduated in all of Utah. DSU is in the process of adding an information systems and analytics major, attempting to fill jobs that often start at more than $80,000 per year.

I am uncertain whether a virtuous cycle of more tech graduates who want to live here can attract more tech companies that in turn attract more tech students. These kinds of things are uncommon. If you haven’t heard of “Silicon Alley” or “Silicon Prairie,” it’s because other metro areas much larger than Southern Utah have tried and failed to achieve the Wasatch front’s critical mass.

Nonetheless, I believe that Dixie State and the Dixie Applied Technology College are our best hopes to evolve beyond servicing retirees. They are trying to build a “tech pipeline” that is preferable to the Lake Powell version. With a little luck, a handful of high tech companies will discover that our retirees were on to something when they chose Southern Utah.

•••

Howard Sierer is a developing columnist for St. George News. The opinions stated in this article are his own and may not be representative of St. George News.

Email: hsierer@stgeorgeutah.com

Twitter: @STGnews

Copyright St. George News, SaintGeorgeUtah.com LLC, 2017, all rights reserved.

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3 Comments

  • Common Sense February 2, 2017 at 7:07 am

    Joyce, good article. While paychecks are not climbing neither has cost of living. We found after moving here from the NW cost of living is significantly lower by as much as 30%. We also discovered my husband could not find a good paying job with his web application development degrees. He ended up going to work in a kind of techy field but is now more of a laborer. Although it is not our ideal dream job, living here in Southern Utah has been like a dream to our family. We love it here! We found it is not hard to find a job if you are willing to actually “work”.

    • Joyce Kuzmanic Joyce Kuzmanic February 2, 2017 at 7:52 am

      Thank you, Common Sense, but I stand corrected: This opinion column is written by Howard Sierer; my mistake in not correctly setting the byline. Howard’s Right On columns are publishing weekly on Thursday mornings.
      Glad you commented!
      ST. GEORGE NEWS
      Joyce Kuzmanic
      Editor in Chief

  • Brian February 2, 2017 at 12:16 pm

    DSU and DXATC have come a long way in serving / furthering the tech community in southern Utah. I’m very excited for the “maker space” DSU will be launching this fall.

    Things like CodeCamp, LaunchPad, Dixie-Techs, Girls Go Digital, FIRST FLL and FTC robotics, 4H, and others all help to introduce kids and youth to tech at an early age and then to refine their skills and explore their interests. Utah and the STEM Action Center have been active supporters of tech as well.

    One thing I see, however, is that in the public schools far too often a teacher is assigned to teach technology that knows less than the average kid in the room. It’s a disservice to these kids. The person teaching tech to our kids should be very qualified and very in touch with where the industry is and where it’s going. That is far from the case now, almost across the board. My kids come home with very funny (and very sad) stories of the dumb things some teachers say when they’re pretending to teach tech. Often these lessons devolve to sending the kids to Code.org or CodeAcademy.com, which are excellent resources, but are no substitute for a teacher that has taken the time and paid the price to be an expert in what they’re teaching.

    In the [unfortunately frequent] cases where the teacher isn’t willing or able to get up to speed they should be reassigned or replaced with enthusiasm.

    Southern Utah is on a good trajectory for tech, for the youth that already have the interest and the aptitude. However, for the rest the best solution is for the parents to get involved. 6 years ago I heard about a Dixie Tech’s presentation on FIRST FLL robotics and went with a friend to see it. We ended up starting a robotics team with our daughters. It was a great experience that continues to this day (we’re going to the state championship next weekend). Parents need to dig in and get involved. You may even learn something (I certainly have), and it’s a great way to spend time with your teenagers.

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