Economy expected to improve slowly
With continuing economic turbulence, there still remains a light at the end of the tunnel for Utah State University students.
John Mathews, a regional labor market economist, said, “I think we’re at the bottom of the business cycle, but we are going to pull out of this. It’s just a matter of time.”
Nevin Limburg, Logan director of economic development, said, “I see 2003 as being better than 2002 for the county and at the national level, despite talk of war.”
In a meeting with the Utah Chapter of the Association for Corporate Growth on Tuesday, Gov. Mike Leavitt acknowledged the state economy has yet to show any signs of recovery from the loss of thousands of jobs.
However, while the entire nation has been affected significantly by the economic decline, Utah hasn’t been hit as hard.
Cris Lewis, professor of economics at USU, said, “Utah’s economy is faring slightly better than other states. The decline is not as bad, but everyone is facing the same problems.”
Utah’s services industry saw employment gains of 3,700 jobs in amusement, recreation, management, health services and government in September. However, in the same month, 20,600 jobs were lost in construction, manufacturing, trade, transportation/communications/utilities (TCU) and finance/insurance/real estate (FIRE), according to the Utah Department of Workforce Services (DWS).
Utah’s 5.3 percent unemployment rate was lower than the national rate of 5.6 percent in September.
Raylene Ireland, executive director of the DWS, said, “Currently, there is a lot of uncertainty in the marketplace, and that factor translates into more cautious behavior by both consumers and businesses. We anticipate that this situation will persist for several more months as the economy and job markets slowly recover.”
Residents of Cache County have been affected least of all counties in Utah.
Limburg said, “We’ve had the best economy of any county in the state for the past two years. There have been downturns that have hit areas a lot harder. We are pretty much our own economy.”
Mathews said Cache County has a 3.9 percent unemployment rate, which is up from 3.2 percent during the same time last year. Nearby, Box Elder County is at 5.8 percent and Weber County is at 5.1 percent.
“Cache Valley has been kind of insulated from the rest of the state and hasn’t been as adversely affected,” he said.
Part-time employment for students in Logan has always been an option because of the secluded economy.
Limburg said, “While other counties in Utah have been losing jobs, Cache County has had an increase in jobs that pay higher. Because of Logan’s healthy economy, it has helped students find jobs while they go to school.”
Lewis said, “I think the economy and employment will improve significantly by the middle of next year for those students who are graduating in June.”
Despite the employment opportunities available in Cache County, some USU seniors are still concerned whether they can find employment when they graduate in April.
Brenden Jensen, a senior majoring in economics, said, “Looking for jobs when I graduate might be a lot tougher, and it doesn’t seem like people are getting raises and promotions as much in their particular fields.”
Lewis said, “With increasing unemployment, there will be fewer opportunities for students for employment and there is a possibility for lower wages. It’s not that the wages are lower than last year, it’s that they are lower than they would have been.”
Some feel a four-year degree will carry people through today’s economy.
Mathews said, “In a four-year program, if students select majors with a significant demand, I don’t think they will have a problem.”
Logan has a healthy economy because of USU’s influx of continual jobs and resources. However, just like many other higher education institutions in Utah, USU is still feeling the crunch.
“There hasn’t been a lot of layoffs, compared to other counties, and the university has also helped stabilize that, but they still have been feeling the effects,” Mathews said.
John DeVilbiss, USU’s executive director for public relations and marketing, said the decline in the tax revenues has affected the university significantly. There has been a $9.5 million reduction in the base budget. But President Kermit L. Hall’s philosophy is to preserve academics as long as possible, he said.
“Support Services has suffered tremendously, and there have been many unfilled positions because of the hiring freeze,” DeVilbiss said.
Other areas of the university suffering from budget cuts are the operating budgets, which include travel, professional development and journal subscriptions in the library.
“It has affected all the things that help us do our job, and it’s not looking much better. We’re in lock-step with the government. All we can do is hold our breath, but we’ve come in really prepared. We’ve been very careful and I credit a lot of that to President Hall,” DeVilbiss said.
As the economy changes over the next year, economists urge students to become more informed to be better prepared for the future.
Lewis said, “All students should be informed about all aspects of the economy and should take Economics 1500 and 2010 so they can read the newspaper intelligently, know what is meant when they are talking about the economy and be able to recognize the misinformation often distributed by the media.”
-mmackay@cc.usu.edu