econscius

How Does Utah Get 6.0% Unemployment?

In Economy, Job Creation, Unemployment, Utah on August 19, 2012 at 1:09 pm

In this time of economic stagnation and perpetual high unemployment, it is useful to look at the handful of states adding jobs and providing lower-than-average jobless rates.  Utah continues to be successful.

Utah’s 6.0% unemployment rate compares to California 10.7%, tourism-dependent Nevada’s 12.0% and Illinois 8.9% [1]  Utah was the third-fastest growing state in the decade ended 2010. [2]

The state offers good jobs.  Utah has the 14th highest median household income of the 50 states, ranking ahead of New York State and Illinois. [5]

Employers like Utah.  Its 5% corporate income tax is 1.6 points below the national average.  The Wall Street Journal points out that tax rate has been unchanged over the past 15 years, whereas New Jersey has revamped its tax code four times since 2000. [3]  Employers prefer planning with confidence in steady regulations and tax rates. 

The state is considered business friendly.  “Barriers to business creation are minimal,” as Utah ranked fourth amongst states in Pacific Research Institute’s most recent US Economic Freedom Index (from 2008). [3]

The economic growth and state-level fiscal sanity is even more impressive given Utah is the nation’s youngest state with the nation’s highest fertility rate. [4]  One quarter of youth are minority. [3]  Large numbers of young children cost the schools and require other infrastructure but are future taxpayers.

Did Utah embark on a spending binge to battle the economic turn-down in 2008?  No.  Utah cut its budget with state-agency budgets sliced an average 19%, totaling $2 billion cut in the first two years of the downturn. [3]  The economy buzzed along.

[1] http://bls.gov/lau/ July 2012 data, retrieved 8/19/12.

[2] http://www.utah.gov/governor/news_media/article.html?article=3963

[3] A nice full-length Utah story is behind the pay-wall at the WSJ: http://online.wsj.com/article/SB10000872396390444405804577559582223445656.html

[4] http://www.ksl.com/?nid=148&sid=13186729

[5] http://en.wikipedia.org/wiki/Household_income_in_the_United_States, 2009 data, retrieved 8/19/12. 

Pictures from Wikipedia Commons.

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  1. […] buddy John Gurney (an economist by training and CPA by practice) posted some footnotes under that title on his “econscius” blog.  In short, Mr. Gurney […]

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