Leading up to COVID-19’s presence in Utah, Salt Lake County’s unemployment rate, which had been hovering at or below 3.5% since November 2014, was at a historical low of 2.3%. Along with such low unemployment rates, the economy continued to create new jobs, with year-over-year growth around 2.6%.
Salt Lake County’s prosperity prior to COVID-19, however, was not universal. Wage growth, long decoupled from productivity, was outpaced by the rising cost of living, especially the cost of housing, requiring many residents to work multiple jobs and long hours to make ends meet. This disproportionately affected, and continues to affect, neighborhoods and communities of color. While the economy was booming for some, many were left to watch the growth pass them by.
During that economic high, Salt Lake County conducted a series of research projects. The first collected data on business challenges from over 500 small businesses. Unsurprisingly ̶ given the low unemployment rates ̶ the primary challenges to businesses orbited around workforce: finding and retaining quality talent were the most cited concerns. In our pre-COVID economy, that made sense.
Those days seem like a distant memory. Now as COVID-19’s initial economic impacts are coming to light, the vulnerabilities present during our season of plenty are more clearly exposed. Filings for unemployment benefits have become weekly benchmarks; according to the Utah Department of Workforce Services, June 4 was the first time since the start of the pandemic that new weekly claims fell below Utah’s previous record high of 5,300 claims in 2013, registering at 4,996 for May 24-30. Salt Lake County, which has historically represented 47% of the State’s jobs, experienced the greatest share.
Unemployment is hardly the only blow dealt by COVID-19.
Public health orders required many businesses to close or significantly alter business practices, and residents have been hesitant to engage in the economy due to health concerns, slowing down economic activity. Decreases in consumer spending and reductions of employee hours have led to loss in income for many, even for those who are still employed, leading to an increase in housing and food insecurity.
These and other impacts cause a majority of county residents to feel that the economic concerns are more salient than the health concerns posed by COVID-19, according to a recent poll. But the impacts go beyond dollars and cents, influencing the population’s well-being. The same poll found a majority of respondents experiencing negative impacts on both their social life and their mental health.
These factors coalesce around the idea that COVID-19 has changed the landscape of work and accelerated trends facing the workforce in the coming decades. Salt Lake County Economic Development explores these concerns and trends in a two-part research report recently released titled: “The Future of Jobs: Employee Values and Satisfaction in the Age of Automation.” The research focuses on two related topics: employee values and automation in the workplace. The reports highlight a model, based on Carl Frey and Michael Osborne’s research, that estimates 33,400 jobs in Salt Lake County are at 98%-99% risk of automation. While the model does not articulate a timeline, the volume of the jobs at risk is startling.
The occupations threatened by automation are described as routine roles. While “white-collar,” routine roles are threatened, jobs under the greatest threat are typically low-wage professions. Additionally, because of historic marginalization, people of color fill many of these positions.
While many low-wage jobs are under threat of automation, many have been found to be essential to society’s functioning. Recent data from the Bureau of Labor Statistics (BLS) shows that low-income earners (earning less than $50,000/year) are more likely to be in jobs that have a high exposure to COVID-19. High-exposure jobs are also disproportionately held by single parents and tend to be hourly, which often correlates with few employer-paid benefits like sick leave or health care.
Even the modest wage gains (4.5%) in the lowest tier of earners that came in 2019 have now been erased, leaving many of these workers unemployed and without jobs to return to. A recent report from the National Bureau of Economic Research estimates that 42% of those laid off will not get their jobs back. Many will struggle to regain what was lost.
Automation, too, has implications and importance amid this pandemic. Changes adopted for public safety may be the new norm as employers find technological solutions that require fewer employees. As some jobs become obsolete, others are likely to increase. According to the BLS, many of the occupations that are projected to grow are in the care fields: home health and personal care aides, for example. These jobs, like many essential jobs, pay low wages, with home health and personal care aides earning around $24,000 annually.
With so many jobs at risk due to the changing nature of work and with projections for increased poverty-wage essential work, what can be done? Salt Lake County’s economy and workforce can continue to be a national leader in business by jumpstarting the fourth industrial revolution.
We must invest now in education, job training and placement, as well as in apprenticeships, relocations, and entrepreneurship. Upskilling and retraining our residents for the jobs that emerge on the other side of this crisis will be critical, as will ensuring that residents can earn a living wage. This requires additional partnerships with community and technical colleges on upskilling the workforce displaced by automation.
Beyond educational investment, other potential responses are outlined in the “Future of Jobs” reports. These include a reduced-hour work week as piloted by Microsoft, France, and Norway and implementing a Universal Basic Income, as piloted by Stockton, CA using philanthropic funds and Alaska through its Alaska Permanent Fund. The list of eleven policy interventions are meant to start conversations rather than be prescriptive.
As the future of jobs emerges, the ingenuity on which we pride ourselves in Utah will become increasingly essential to ensure that no one is lost. Unity in the workforce and diversity in our economy will allow us to continue building a resilient Salt Lake County far beyond the COVID-19 pandemic.
Blake H. Thomas currently serves as the Economic Development Director in the Office of Regional Development at Salt Lake County.
