Utah Priorities 2016, Issue #5: Jobs and the Economy

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Wage Growth
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The anemic economic recovery from the 2008 recession had kept jobs and the economy as Utah voters’ highest priority through 2012. Utah’s economy has since emerged as one of the best in the nation, with a low unemployment rate and many companies reporting employee shortages. Voters with lower levels of education had a higher level of concern than those with more education. Full-time workers were more concerned than retirees and stay-at-home parents.1 While jobs and the economy is no longer voters’ highest priority, the Utah Priorities Project found widespread concern regarding wages, cost of living, and the availability of jobs.

WAGES AND COST OF LIVING

The Bureau of Labor Statistics has a number of different ways of measuring wages, including a monthly survey of individuals and a quarterly census of businesses. Each dataset has its own advantages and drawbacks, but both indicate that wages fell during or after the 2008 recession, remained stagnant from mid-2012 to 2014, and grew in 2015.2 While these data indicate that wages might be slowly increasing, they do not address the flipside of the coin: Utah’s cost of living.

Living Wages
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LIVING WAGES

A cost-of-living calculator created by the Massachusetts Institute of Technology estimates both a living wage and a poverty wage.3 A living wage is a wage level at which individuals could comfortably provide for their families, while a poverty wage is a point where basic needs are just barely accounted for. Estimates vary by family situation and local costs. Combining the living wage data with income data from the Census Bureau, 74% of working Utah households earn a living wage, ranking the state 31st in the nation.4 While the share of Utah households earning a living wage is below average, only 5% of working Utah households fell below poverty wages, ranking it 8th in the nation. In other words, wages in Utah are substantial enough to comfortably provide for three-quarters of working households, and enough to keep nearly all working households out of poverty.

MINIMUM WAGE

Support for Minimum Wage Increase
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One way policy makers can exercise direct control over wages is by setting a minimum wage. The topic has received national attention, is on the ballot in neighboring Colorado and four other states, and has been recently discussed in Utah, although no legislation actually passed.5

Utah Foundation wanted to better understand what Utah voters thought about a minimum wage increase. When asked to rate their level of agreement with the statement “the minimum wage should be increased from $7.25 to $10.10,” 41% disagreed and 41% agreed.6

An individual’s level of agreement with a minimum wage increase was tightly linked to numerous demographic factors. Divisions based on ideology are no surprise; 84% of liberals support an increase in the minimum wage, along with half of moderates, and less than a quarter of conservatives. Additionally, Utah voters with lower levels of education – those most likely to be affected by a minimum wage increase – approve more readily; 59% of Utah voters with no college experience are in favor of the increase while only 38% of those with college degrees are in favor of the minimum wage increase.

Minimum Wage Estimates
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In an analysis of the impact of a minimum wage increase, the Utah Department of Workforce Services (DWS) estimated that approximately 10% of working Utahns would be affected by a minimum wage increase to $10.00, and 18% would be affected by an increase to $12.00.7 Opponents of minimum wage increases often point out that the individuals helped most are teenagers, who generally have additional monetary support from parents.8 However, DWS data indicate that a majority of those who would see a raise from a minimum wage increase are between the ages of 20 and 35. Most of the individuals in these age groups are partially or completely independent and often have others dependent on their income.

Both data and opinions regarding the impact of a minimum wage increase are mixed. Opponents argue that by setting a minimum wage, the government harms businesses and employers, and overall employment falls. Supporters claim that workers with higher wages will spend more, thereby driving economic growth. Actual data from minimum wage increases across the country tend to indicate that there is little effect from modest minimum wage increases.9

Based on Utah Priorities Project survey data, an increase of the minimum wage to $10.10 evenly divides supporters and opponents, suggesting it might be a good compromise. Perhaps a smaller increase might even gain a majority of supporters among all Utahns rather than only moderate and liberal Utahns.

PAID PARENTAL LEAVE

In addition to inquiring about minimum wage, Utah Foundation asked voters about paid parental leave. This might be of particular interest in Utah which has the highest fertility rate in the nation.10 Voters were asked whether they agreed or disagreed with the statement “there should be requirements for employers to offer paid parental leave.” Just over 40% of Utah voters agreed with the statement while 31% disagreed. As expected, the question broke down over ideological lines; 65% of liberals agreed with the statement while only 24% of conservatives agreed. Perhaps surprisingly, there was no observable difference between the opinions of men and women.11 There was a large difference between married and single Utah voters. Contrary to what one might expect, single individuals were more likely to agree that employers should offer paid parental leave (52%) than married individuals (37%), though it would seem that the latter would be more likely to use paid parental leave. Some of this difference is driven by the fact that single Utah voters tend to be more liberal than married Utah voters.


This research brief was written by Utah Foundation Research Analyst Christopher Collard.

  1. ^ For full methodological details, see part I of the 2016 Utah Priorities Project: Appendix A. http://www.utahfoundation.org/uploads/rr739.pdf
  2. ^ The monthly survey is known as the Current Employment Statistics (CES) survey, while the quarterly census refers to the Quarterly Census of Employment and Wages (QCEW). It should be noted that they both measure slightly different thigs, the CES reports hourly wages and the QCEW reports total payrolls by number of employees for an average weekly wage. Utah workers’ average weekly hours during this time period was 35.1 (according to the CES), so wages were converted to hourly earnings based on that number. It is essentially the same as plotting the QCEW on a second axis to make it somewhat comparable with CES data.
  3. ^ Nadeau, Carey Ann. “Living Wage Calculator: User’s Guide / Technical Notes.” http://livingwage.mit.edu/resources/Living-Wage-User-Guide-and-Technical-Notes-2015.pdf (Accessed August 29, 2016)
  4. ^ Working households are households where the primary householder or a significant other are in the labor force.
  5. ^ The four other states include South Dakota, Maine, Washington, and Arizona. Colorado, Main and Arizona have a proposal to raise it to $12.00 by 2020 while Washington aims for $13.50. South Dakota recently passed a law decreasing the minimum wage for those under 18 from $8.50 to $7.50 and untied it from inflation. The current referendum is to veto this law. Ballotpedia. “Minimum wage on the ballot.” Ballotpedia. https://ballotpedia.org/Minimum_wage_on_the_ballot (Accessed August 29, 2016)
  6. ^ Level of agreement was on a 5-point scale, from disagree to agree; 3 was neither agreeing nor disagreeing.
  7. ^ Utah Department of Workforce Services. A series of unpublished tables looking at incremental increases to minimum wage and the age of workers affected. Please contact DWS or Utah Foundation if you are interested in seeing the data in these tables.
  8. ^ Sherk, James. “Who earns the minimum wage? Suburban teenagers, not single parents” Heritage Foundation. http://www.heritage.org/research/reports/2013/02/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents (Accessed August 29, 2016)
  9. ^ The Initiative on Global Markets. “Minimum Wage” University of Chicago. http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_br0IEq5a9E77NMV; The Initiative on Global Markets. “Minimum Wage” University of Chicago. http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_e9vyBJWi3mNpwzj (Accessed August 29, 2016).
  10. ^ Bateman, Mallory and Christopher Collard. “Millennials and Boomers: How Utah’s generations compare to each other and the nation.” http://www.utahfoundation.org/uploads/rr730a.pdf (accessed August 29, 2016)
  11. ^ This could be due to a smaller sample size. Larger studies might be able to find a difference.
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