Utah needs a long-term strategy to address its worker shortage

Tuesday , January 16, 2018 - 4:00 AM2 comments

JEFF STEAGALL, special to the Standard-Examiner

The Utah economy, like much of the American economy, is booming as 2018 begins. The recent tax bill will likely provide fuel for a further short-term boost. Good news, right?

But as our strong local economic engine creates jobs, who will fill them? In November 2017, Utah’s unemployment rate was 3.2 percent, significantly lower than our long-term average of 4.94 percent. Indeed, the unemployment rate is so low that nearly anyone who wants a job can get one very quickly.

In other words, we simply don’t have the extra people who can fill new positions. That problem gets worse as the quality of the jobs (and the amount they pay) gets better. Where can Utah get these incremental workers?

There are three possible sources of workers. We can grow our own workforce, draw other Americans to Utah or recruit workers from abroad.

First, in terms of developing our own workforce, Utah has an advantage over many states — our working-age population is growing. But it takes time and money to train and educate children for the jobs of the 21st century.

As the Legislature prepares for its annual session, members are considering how to spend the sizeable surplus in state revenues. Allocating the majority of that surplus to enhancing education at all levels would be an excellent investment in the state’s future workforce.

Late last year, Gov. Gary Herbert declared 2018 the “Year of Technical Education.” Certainly funding for technical jobs, such as manufacturing, engineering and computer programming, is important for our economy — all of these sectors are strong in Utah.

But funding increases cannot and should not be restricted to a narrow set of technical programs.

Current funding levels of Utah’s K-12 system is embarrassing. In recent years, Utah has ranked 51st in the nation (the District of Columbia is included in the ranking) in per-pupil K-12 expenditures. It is difficult for our fine technical colleges and universities to prepare students well for the demanding jobs of the 21st century without a sounder K-12 foundation on which to build.

A broad-based university education is essential for ensuring that our future business and civic leaders have the creativity, leadership and critical thinking skills that will allow them to adapt to the fast-changing, global world of the future.

K-12, technical colleges and universities need all the increased funding they can get.

Of course better education funding cannot solve the labor shortage problem in the short-term. To do that, the state must convince out-of-state employees to move to Utah. One major obstacle preventing that is the quality of the K-12 system. In considering opening a facility, corporate leaders want to ensure their employees’ children have access to high-quality education. Statistics such as the lowest per-pupil spending on K-12 make it difficult to convince decision makers to invest here.

Utah can also recruit foreign nationals. In this realm, Utah has significant strengths. Many Utahns speak a foreign language, have an appreciation of foreign cultures and have even traveled or lived abroad, making the state more immigrant-friendly than most.

Utah has a strong international business sector, particularly for a landlocked state. So the international connections and global skills that immigrants bring are particularly useful here.

To make recruiting international workers easier, Utah’s voters and legislators ought to take a look at what China did in terms of immigration policy reform last week. China identified a set of job categories that are essential for future global business leadership. Examples include scientists and leaders in technology-intensive sectors.

China streamlined the process by which its firms can hire such individuals. For example, some hires can be made immediately, with foreign workers receiving a six-month visa waiver, allowing them to work immediately. Moreover, their spouses and children can get their visas in a single day.

Compare this model to the byzantine, drawn-out process the U.S. uses to vet work visa applicants. China wins.

The U.S. needs immigration reform, so the current discussion on how to keep foreigners out is the wrong discussion. We should continue to encourage the world’s best and brightest stars to become part of our economy. It’s worked for the United States for hundreds of years.

To sum up, legislators should take advantage of the surplus to make a real investment in education at all levels. Influential people should also push to reset national politicians’ thinking on immigration.

Dr. Jeff Steagall is the dean of Weber State University’s John B. Goddard School of Business & Economics and a professor of economics. Twitter: @SteagallJeff.

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