Where Are All the Workers?

While Indiana’s unemployment dipped to 3.6% last month, Utah is a full half point lower. The New York Times recently cites some of the challenges that brings. A few excerpts:

After eight years of steady growth, the main economic concern in Utah and a growing number of other states is no longer a lack of jobs, but a lack of workers. The unemployment rate here fell to 3.1%, among the lowest figures in the nation.

Nearly a third of the 388 metropolitan areas tracked by the Bureau of Labor Statistics have an unemployment rate below 4%, well below the level that economists consider “full employment,” the normal churn of people quitting to find new jobs. The rate in some cities, like Ames, Iowa, and Boulder, Colo., is even lower, at 2%.

That’s good news for workers, who are reaping wage increases and moving to better jobs after years of stagnating pay that, for many, was stuck at a low level. Daniel Edlund, a 21-year-old call center worker in Provo, Utah, learned on a Monday that his hours were changing. On Wednesday, he had his first interview for a new job.

But labor shortages are weighing on overall economic growth, slowing the pace of expansion in northern Utah and other fast-growing regions even as unemployment remains stubbornly high in Rust Belt cities like Cleveland and in regions still recovering from the 2008 recession, like inland California.

To Todd Bingham, the president of the Utah Manufacturers Association, “3.1 percent unemployment is fabulous unless you’re looking to hire people.”

“Our companies are saying, ‘We could grow faster, we could produce more product, if we had the workers,’” he said. “Is it holding the economy back? I think it definitely is.”

But the share of Utah adults who have withdrawn from the labor force remains higher than before the recession. Last year, 31.7% of adults in Utah were neither working nor looking for work, up from 28.2% in 2006. That is part of a broad national trend.

Utah Tops List of Where Growth is Happening

Utah’s population topped three million people in 2016, with the state being the fastest growing in the 12-month period starting July 1, 2015. The western flavor continued with others at the top of the list including Nevada, Idaho, Florida and Washington.

Now, approximately 38% of the population lives in what the Census Bureau identifies as the South, with 24% in the West.

Kiplinger goes a step further, with cities where it expects job creation to thrive going forward. At the top of that list (with a reason or two cited) are:

  • St, George, Utah: magnet for tourists visiting Zion National Park and retirees seeking pleasant weather
  • Bend and Redmond, Oregon: also strong in tourism and drawing retirees
  • Cleveland, Tennessee: home to a wide range of manufacturing operations
  • Prescott, Arizona: cooler climate makes it an attractive alternative to Phoenix
  • Savannah, Georgia: home of the fourth-busiest ocean port, which will grow once its harbor is deepened to handle larger vessels

Waiting … and Waiting on a Highway Funding Fix

30449450Federal highway funding is running low. Nothing new there. The Indiana Chamber, and many others, have called for long-term solutions from Washington instead of short-term fixes that simply extend the uncertainty.

How are states reacting to the current dilemma. According to the Kiplinger Letter:

  • Arkansas, Georgia, Wyoming and Tennessee have postponed 440 projects totaling more than $1.3 billion
  • Iowa, South Dakota and Utah have increased gas taxes. Others that may follow include Georgia, Idaho, Minnesota, Nebraska and South Carolina
  • Seeking funds from advertisers: Virginia sells space on highway rest stop signs to GEICO; Travelers Marketing sponsors highway patrols in Massachusetts
  • Partnering with private investors: Florida is seeking private funds to rebuild portions of Interstate 4; New Jersey, Pennsylvania and Virginia are seeking similar ventures

Kiplinger editors add:

But states can only do so much on their own. Ultimately, Congress must act. Odds favor another temporary fix this fall. A long-term solution will likely wait until 2017. Congress and a new president will have a fresh opportunity to tackle broad tax reform, including a possible hike in federal fuel taxes, which no longer approach what’s needed to pay for highway work.

Not what many want to hear in terms of the time frame.

Picking Up a Book? We’re Not Doing It

23104098How do Americans spend their time? Wylie Communications reports:

  • Engaging in leisure activities: 4 hours, 27 minutes a day (Utah) to 6 hours, 8 minutes a day (West Virginia)
  • Watching TV: 2 hours, 3 minutes a day (West Virginia) to 3 hours, 38 minutes a day (Utah)
  • Using a computer for games or leisure: 19 to 31 minutes a day on weekdays and 22 to 37 minutes on weekends
  • Reading: 13 minutes a day (most Southern states) to 29 minutes a day (North Dakota)

And the news worsens. Teens spend just 4 minutes a day reading for pleasure. Young adults (25 to 34) read for fun for just 8 minutes a day.

Those numbers are downright scary for more than a few reasons.

Gigerich: Indiana Business Climate is Good News, Bad News Scenario

Larry Gigerich of site selector Ginovus penned an informative column for Inside INdiana Business about Indiana's business climate. While we have come a long way and are currently envied by many states, there is still work to be done. He writes:

A few weeks ago, the Kauffman Foundation and Thumbtack.com released an annual ranking of states for their friendliness to small businesses. Indiana ranked 15th for 2013. The study analyzed several factors including items related to tax climate, work force development and regulatory issues. Eight-thousand small businesses were contacted for feedback regarding the study's criteria. Here is how Indiana ranked in each category.

1. Overall Friendliness: B+
2. Ease of Starting a Business: B+
3. Ease of Hiring: F
4. Regulations: C
5. Health and Safety: D
6. Employment, Labor and Hiring: C-
7. Tax Code: D
8. Licensing: A-
9. Environmental: D
10. Zoning: B-
11. Training and Networking Programs: C-

The grades given to Indiana are not surprising. Work force development and job training have been a focus of Governor Mike Pence and the legislature since the beginning of the year. Indiana's educational achievement, continuing learning for adults in the work force and availability of certification/credential programs have not been where they need to be. While progress has been made, there is still much to be done by government, educational providers, not-for-profits and the private sectors.

Indiana has been recognized as a relatively easy place to start and grow a business. This report points to that in terms of licensing, zoning and other factors affecting the launch of a new business.

The tax code ranking is a bit surprising, but the survey asked small businesses if they were paying too much in taxes for their locations. The elimination of the state inheritance tax, which impacts small and family-owned businesses, could help improve this ranking.

Indiana continues to struggle with rankings where health and environmental issues are considered. In particular, the state's obesity and smoking rates are unacceptably high. These items impact healthcare costs, number of missed days of work and quality of life. In terms of the environment, Indiana's long-term large manufacturing presence has impacted water, air and soil quality. While important steps have been taken in the areas, there is much left to be done.

The top five states for small businesses are (in order): Utah, Alabama, New Hampshire, Idaho and Texas. The bottom five are (in order): Illinois, California, Hawaii, Maine and Rhode Island.

In summary, Indiana's ranking relative to the rest of the country is good. Policymakers in the state should focus on ways to improve our weaknesses in order to move Indiana into the top 10. Due to the fact that Indiana has never been a location for large headquarters for companies, small businesses are and will continue to be the lifeblood of the state's economic growth.

Nevada’s Luck Not Good Thus Far on Water Deal

Like many states, Indiana wrestles with water supply issues and a viable statewide plan is desperately needed. However, our situation is not nearly as dire as it is for Nevada. Stateline documents how a water pact between Nevada and Utah, which was mandated in 2004 and tentatively agreed to in 2009, has now washed down the drain as Utah's governor poured cold water on the deal (so many water puns).

Now Nevada — and the nation — must combat the challenges of having a major city and global tourist destination in the middle of the desert. As a poker enthusiast, Las Vegas has a special place in my heart and I truly hope an agreement can be reached to keep Southern Nevada from having to swim upstream on this issue (sorry). Stateline writes:

The states produced a plan by 2009, splitting the rights down the middle. Utah had already appropriated about 18 billion gallons, more than four times what Nevada had. Under the agreement, Nevada would have received another 12 billion gallons per year, with Utah getting 2 billion more.

Nevada quickly signed. But Herbert, a Republican, long put off his decision amid legal challenges and further study.

The pact would allow Nevada to send Snake Valley water to Las Vegas through a proposed pipeline that could also include straws to nearby communities.

Some 90 percent of Southern Nevada’s water comes from Lake Mead, the Hoover Dam reservoir fed by the Colorado River. Studies have shown, however, the supply is shrinking by as much as 7 percent each year, exacerbated by recent severe drought.

The Southern Nevada Water Authority has called the pipeline a safety net, only to be built if Lake Mead becomes dangerously low, which some water experts say could happen within a decade. But questions have arisen about whether the authority could finance the multi-billion project.

In Utah and parts of Nevada, the pipeline prospect has proved unpopular, spurring loud protests from a variety of groups, including environmentalists, Native American tribes, farmers and ranchers who worry the project would damage the communities and threaten their way of life.

“The project would create a massive dustbowl,” said Zach Frankel, executive director of the Utah Rivers Council, which has opposed the pipeline and the pact.

The ultimate fear is that Snake Valley would face the same fate as California’s Owens Lake, which catastrophically dried up nearly a century ago when officials diverted its water source — the Owens River— to feed booming Los Angeles. Today, though some flow has returned, the vast salty area northeast of Los Angeles remains the largest single source of dust pollution in the U.S.

Last October, a trio of water attorneys advised Herbert that the agreement was the preferred option to a lengthy legal battle.

“The agreements, while not perfect, provide a framework to protect the interests of water users and citizens as a whole in each state and provide a process to address adverse impacts early on if detected to avoid significant harm to anyone,” the report said.

But on Wednesday, after visiting locals who would be impacted by a water transfer, Herbert announced he would not sign.

“There is no more complex and emotional issue with which I have grappled as governor of this great state,” he said. “I won't impose a solution on those most impacted that they themselves cannot support.”

Now, it’s Nevada’s move, but it’s unclear what it will do.

The Southern Nevada Water Authority said it was disappointed in Herbert’s decision. “In the coming days and weeks, we will evaluate our options to address this unprecedented action,” it said in a statement.

Nevada governor Brian Sandoval’s office referred questions to the state’s Division of Environmental Protection, which did not answer messages.

McCool, the water expert, said Las Vegas’ water crisis, along with the political and financial challenges of proposed projects to meet its needs, could spur Utah to sell some of its unallocated rights along the Colorado to Nevada. Or, further in the future, perhaps all seven states will rework the 91-year-old Colorado River Compact to give Nevada a bigger share.

Under the compact, Nevada only receives 4 percent of the allocations. That’s because no one in 1922 anticipated some 2 million people would eventually make their lives in the desert.

“The straw that breaks the camel’s back is going to be Las Vegas,” said McCool, who dubs this period in western water history “the big shakeout.”

“This is where we’ll figure out who has the political will and connections to get this thing done.”

Poll: We’re Striving to Thrive But Falling Short

Gallup is certainly one of the kings when it comes to the polling world. Its latest effort, the Gallup-Healthways Well-Being Index, seems to require a bit more interpretation than most.

Respondents were asked to rate their lives today and their expectations for their lives in five years. The answers lead to classifications of ‘thriving," "struggling" or "suffering." Indiana finds itself on the bottom 10 list of states with the lowest percentage of residents thriving.

Biggest improvement from 2011 to 2012: South Dakota, third overall; biggest drop over the last year: Alaska. In somewhat of a contrast, South Dakota was also among the four states (with Wyoming, West Virginia and Vermont) that are "least optimistic" about five years from now compared to today. In the "most optimistic" category for five years hence, honors go to Louisiana, Georgia, Texas, Florida, Ohio (breaking the Southern monopoly) and Hawaii.

Top 10 "thrivers" in 2012: Hawaii, Utah, South Dakota, Maryland, Texas, New Hampshire, Nebraska, New Mexico, Colorado and Minnesota. The bottom 10: West Virginia, Maine, Delaware, Nevada, Oregon, Tennessee, Kentucky, Ohio, Indiana and Florida.

What does it mean? In Gallup’s words:

Gallup’s research has shown that people take a variety of factors into account when rating their lives. While this thriving measure doesn’t always align perfectly with macro-level trends on economic indicators such as economic confidence and job creation, it is known to correlate with personal factors in one’s own life including career, social, physical, financial, and community wellbeing. To that end, the states that do best overall in "thriving" are similar to those best positioned for future livability based on a variety of factors encompassing economic, workplace, community, and personal choices. As such, it remains clear that a broad-based approach will likely fare best in terms of improving how residents rate their lives and their level of optimism for the future.

 

Here’s a Vote for Cleaning Up the Rolls

When you read as many reports, studies, analyses and similar materials as I do, it’s difficult to be shocked by many of the facts that emerge. But check out these numbers from the Pew Center on the States regarding voter registration:

  • 24 million vote registrations either invalid or largely inaccurate
  • 1.8 million dead people still listed as active voters
  • 2.75 million who are registered to vote in more than one state
  • 51 million (estimated) voting-age U.S. residents who are not registered

Here’s a portion of the NPR story on the findings.

Election officials say one problem is that Americans move around a lot. And when they do, they seldom alert the local election office that they’ve left.

Ben Skupien, a registered voter who now lives in Northern Virginia, is pretty typical. He has moved repeatedly over the years and says he’s probably registered to vote in about a half-dozen states.

"The assumption, I would think, is that they would do the courtesy of letting the other states know that if you’re registered with a new state, [the old registration] would no longer apply," said Skupien.

In fact, states seldom share such information. The Pew study found that almost 3 million people are registered to vote in more than one state.

Voters also die, which leads to another problem, says Linda Lamone, who runs Maryland’s elections.

"If a John Smith lives in Maryland and goes to another state, say on vacation, and dies," Lamone said, "the law of the state where John Smith dies dictates whether or not the Maryland vital statistics people can share that information with me."

And even when they do — or if a person dies in-state — there’s often a delay before election officials are alerted. It’s also not always clear that the individual on the death certificate is the same one who’s registered to vote. Election officials still have to do a lot more digging to avoid accidentally taking someone off the rolls who is very much alive.

Washington Secretary of State Sam Reed says it’s amazing how many times his state has come across names on the voter rolls that appear to be the same person, but turn out not to be.

"We’ve even had cases, in very small counties, people [with the] same name and same birth dates," added Reed.

He said that has led to inaccurate reports that "dead" people are voting. He admits there have been a few cases in his state where widows or widowers have cast ballots for former spouses, but he said such fraud is very rare.

Still, election officials say it’s important that the public have confidence in the system.

So Washington and seven other states — Oregon, Colorado, Delaware, Maryland, Virginia, Utah and Nevada — are joining a pilot program to share more voter information and other databases, to try to make their lists more accurate. 

Utah Changes Course on Four-Day Workweek

We’ve written about the Utah government’s move to a four-day workweek on this blog before. But if the opposite of "Back to the Future" is "Forward to the Past," then I guess that’s what the Beehive State is doing now, as it plans to once again use the five-day model like everyone else. As this article from the Deseret News conveys, the move — initially launched by former Gov. (and current presidential candidate) Jon Huntsman — was expected to save $3 million. The move hasn’t realized those savings, however. I guess you could throw that in the "Well, it was worth a shot" file.

Gov. Gary Herbert announced he was ending Utah’s four-day workweek as of Sept. 6 in a letter to state workers.

"Most certainly, this decision will generate mixed feelings," the governor said in the letter released early Wednesday evening by his office, calling the return to a Monday through Friday schedule "the best alternative to balance both customer and employee needs."

Herbert’s decision follows action by lawmakers last month to override his veto of a bill requiring state agencies to reopen on Fridays. The bill would have allowed agencies to keep some employees on a workweek of four 10-hour days.

But staying open longer hours and reopening Fridays carried a price tag of some $800,000 that was not funded by the Legislature, the governor said after the veto override. His letter said the decision to return to eight-hour work days was necessary to "comply with legislative mandates and remain within budget constraints."

It was former Gov. Jon Huntsman Jr. who instituted the four-day workweek in 2008 as a cost-saving measure. Huntsman had hoped closing offices on Fridays would cut some $3 million from the state’s energy bills, but an audit found the savings fell far short of that goal.

Herbert said the new hours of operation for state offices, from 8 a.m. to 5 p.m., Monday through Friday, will take effect Sept. 6, the day after Labor Day. He said in the letter he hoped that would be enough time for state workers to make the needed adjustments to their personal and professional lives.

"This transition will undoubtedly require a spirt of cooperation from all employees, so please know I personally appreciate everything you do on behalf of the people of Utah," the governor wrote. 

Four-Day Workweek Still Worth Discussing for Some

Would you rather work four 10-hour days than five eight-hour days? It’s been a topic of debate for a few years now, and MSNBC has the latest story about a private company that’s about to give it a shot:

Bert Martinez, CEO of a business-training firm in Houston, has decided to blow away the five-day workweek for himself and his staff of 28.

Starting next month the entire company is going to work for four ten-hour days instead of five eight-hour days, and the company’s workweek will stay that way if productivity and profits stay the same or increase. It’s all part of Martinez’s strategy to take back his personal life, and his general inclination to shake things up at the firm.

“I want to spend more time with my family, and I’m really curious to see if results are going to stay the same,” Martinez said. “Will we lose money or make money? We’ll see what happens.

Martinez may be onto something. While his experiment may sound unusual, it’s actually part of a growing movement to rethink the standard five-day, 40-hour workweek that has been around in this country since the New Deal.

One larger example of the phenomenon is seen in Utah. In 2008, then-Gov. Jon Huntsman launched the “Working 4 Utah” plan to shift state workers who were putting in five-day weeks to a Monday-through-Thursday, 7 a.m.-to-6 p.m. work schedule. The verdict: Employee satisfaction, energy savings and a boon for the environment.

“I don’t think we have any plans to go back to five days,” said Jeff Herring, executive director of the Utah Department of Human Resource Management. Still, he added that the state is continuing to monitor the new work system to make sure it’s saving money and working both for employees and the public that uses state services.

It’s a radical idea and not without its critics. Utah State Rep. Michael Noel called the initiative “stupid” in a New York Times article last week that said other states are considering following Utah’s lead. Some experts question whether we would ever be able to abandon the five-day grind so entrenched in corporations and society at large.