The economy’s great, but Utahns still ask: ‘Where’s my raise?’

May 21, 2018, 11:28 PM | Updated: Jul 13, 2018, 5:33 pm

SALT LAKE CITY, Utah – Amid Utah’s record economic boom and strong job growth, many Utahns are asking: “Where’s my raise?”

“We’re working hard, we’re doing everything we can, but it’s not enough,” Taylorsville resident Angela McKinnon said. “Sometimes you end up feeling stuck because I’ve thought through every option a million times.”

Now that her rent is increasing every six months, Angela McKinnon says her paycheck is not keeping pace.

As a single mom working full time at a customer service call center, McKinnon says the monthly money crunch can be overwhelming.

“We don’t have cable, we don’t have a fancy car,” she said. “The things that I’m paying for are things that I have to have. There’s nothing to cut out.”

Even after advancing after 10 years on the job, she says her yearly raises aren’t keeping pace with the rising cost of living.

“I don’t think it’s possible to keep up with the way everything is increasing,” she said. “I’m not spending my money on fancy things.”

Recently, McKinnon’s landlord switched to only allowing six-month leases.

“So that means twice a year the rent is going up,” she said.

The struggle for some Utahns to keep up with the rising cost of living, especially the sharp increases in housing costs, stands in sharp contrast to the overall positive economic landscape.

Utah ranks first in the nation for job growth, according to the Utah Department of Workforce Services.

“Our job growth has been strong and steady for quite some time,” said Carrie Mayne, the chief economist for the Utah Department of Workforce Services. “Wages are not growing at the rate that housing prices are, and so you start to price people out of homes.”

The latest economic report from the Utah Department of Workforce Services shows the Beehive State ranking first in the nation for job growth for the second month in a row. What’s more, the unemployment rate sits at a very low 3.1 percent.

While the average wage in Utah is increasing, Mayne says wage growth has lagged during the past nine years of economic expansion.

“It hasn’t been very steady, on average, it hasn’t been as strong as we expect it to be,” she said.

The most recent economic report to the governor put the average wage in Utah at $47,012.

The average wage in Utah grew to $47,012 in 2017, according to the latest Utah Economic Report to the Governor. That’s a “healthy” increase of 5.3 percent from the year before. However, the wage forecast for this year is for “moderately lower levels of growth,” the report reads.

Those with careers in technology, construction and healthcare are seeing increases in pay, according to Mayne, because of a shortage of workers in those industries.

Normally, as unemployment drops, wages increase. That predictable pattern happened late in this current economic expansion and puzzled economists.

“In the early stages of the recovery that was just a question for us. The unemployment rate is coming down—where is the wage growth?” said Juliette Tennert, director of economics and public policy at the University of Utah’s Kem C. Gardner Policy Institute.

Wages are increasing in Utah for workers in construction, technology, and healthcare.

The issue of wage stagnation is happening nationwide. Possible explanations include lower-paid workers replacing retiring baby boomers, or a possible shift in the mix of jobs since the Great Recession, or working-age people re-entering the job market, who aren’t counted in the unemployment rate, and preventing upward pressure on wages.

“Finally, we’re seeing this return to wage growth but it’s certainly not at the pace that we’ve experienced,” Tennert said. “When we have a very low unemployment rate, we expect there to be lots of upward pressure on wages because businesses need to fill positions.”

There’s another post-recession phenomenon that could be keeping take-home pay from growing: companies playing it safe by handing out one-time bonuses or other perks instead of a permanent raises.

“It’s a safer way for them to incentivize their workers,” Mayne said. “If they increase your wage they’ve locked themselves in. It’s very difficult to pull back on a worker’s salary.”

While the extra cash is great for families and the economy, it’s not the same as a salary bump.

“You don’t want to commit those funds to a mortgage because they are not guaranteed on an ongoing basis,” Tennert said.

Economists say workers who feel they are past due for a raise should act now and take advantage of the tightening labor market.

“The economic climate is such that it’s in the favor of the worker,” Mayne said. “Now is the time to approach your employer; now is the time to apply for the manager position that you’ve never applied for before; now is time to look at competitor companies and see if they are paying more.”

The bottom line, if you wait for the economy to slow down to seek a higher salary, it could be too late.

KSL 5 TV Live

Top Stories

Unaffordable Utah

Brenda White cookies...
Matt Gephardt

Gephardt Busts Inflation: Rent prices down nationwide but very high in Utah

All over the country, the cost of rent is finally starting to go down. But that is not the case here in Utah.
2 months ago
Ladd Egan

Unaffordable Utah: Keep the holiday magic alive without breaking the bank

From the Thanksgiving turkey to the presents under the tree, the holidays are expected to be more expensive this year.
3 months ago
Housing construction....
Ladd Egan

Unaffordable Utah: Mortgage rates climb again as buyers look for price reductions

Utah's housing market is whiplashing as last year's buying frenzy seems to have slowed down to signs of a recession.
4 months ago
County leaders broke ground Friday to transform two public housing buildings into modern affordable...
Jed Boal, KSL TV

Work begins on 300 affordable housing units for Salt Lake seniors

Salt Lake County made a big move Friday to preserve and improve nearly 300 affordable housing units for seniors.
7 months ago
Ladd Egan

Home valuations jump dramatically, but watchdog group expects modest increase in property taxes

Assessors across Utah are finishing up home valuations for upcoming property tax notices, and two counties are already reporting big increases in values.
8 months ago
Utah's hot housing market...
Ladd Egan, KSL TV

Utah housing expert predicts pullback in activity because of mortgage rates

An expert in Utah’s housing market expects that rising mortgage rates will cause a pullback in real estate activity and a slowdown in home price increases.
8 months ago

Sponsored Articles

vintage photo of lighting showroom featuring chandeliers, lamps, wall lights and mirrors...
Lighting Design

History of Lighting Design | Over 25 Years of Providing Utah With the Latest Trends and Styles

Read about the history of Lighting Design, a family-owned and operated business that paved the way for the lighting industry in Utah.
Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
The economy’s great, but Utahns still ask: ‘Where’s my raise?’