Utah's little secret: Inclusion a key to economic growth

By Whitney Evans, Deseret News

Published: Mon, May 27, 2013, 1:40 p.m. MDT

 Tiara, 6, of Salt Lake City helps her mother get groceries at the Bishops' Central Storehouse in Salt Lake City on Tuesday, May 21, 2013.

Tiara, 6, of Salt Lake City helps her mother get groceries at the Bishops' Central Storehouse in Salt Lake City on Tuesday, May 21, 2013.

(Laura Seitz, Deseret News)

SALT LAKE CITY — Last week Utah Gov. Gary Herbert stood and spoke — again — about the strength of Utah's economy following a sixth-straight No. 1 ranking for the state's economy by the The American Legislative Exchange Council.

It's become a regular task for the governor, highlighting Utah's pro-business tax rates, the size of Utah's government workforce (small), a doubling in the volume of its exports, supporting 66,000 jobs; and an unemployment rate that last month stood at 4.7 percent of the workforce, nearly three full percentage points below the 7.5 percent national unemployment rate.

Now comes another key to Utah's success: the ability to be inclusive despite changing demographics. Inclusion has emerged as an economic indicator, according to researchers measuring the impact of change on communities.

The Salt Lake metropolitan area, consisting of Tooele, Salt Lake and Summit counties, is one of four metropolitan areas with high levels of economic growth and the ability to be inclusive across minority and demographic groups.

Areas with high levels of immigration typically have greater income disparity, researchers found, and the greater the wage gap, the less likely a region is to grow. But the Salt Lake area is among communities reaching across religious, social, racial and economic lines to generate shared knowledge and create growth across sectors.

"We tried to ask the question, 'Where are the places in the U.S. where over the last 30 years there's been an ability to achieve sustainable economic growth and also an ability to, in that process, lift all boats?'" Manuel Pastor, professor of sociology at the University of Southern California, said.

"It turns out that the Salt Lake metropolitan area is one of those places that's been able to do that - to do more inclusive growth."

Minorities made up only a fraction of Utah's population when Theresa Martinez first moved to Utah more than 20 years ago. But now minorities comprise about one-fifth of the state's population and a quarter of Salt Lake City's population, according to the 2010 Census.

Minority children make up the majority of students in 15 of Salt Lake City's 27 elementary schools. And nine of those schools have minority populations of 80 percent or higher, pointing to a diverse future.

Martinez said in her two decades here she has seen community, business and religious leaders work together to confront the challenges that come with a rapid shift in demographics, including income disparity and segregation.

"There are such visionaries in the community who really value diversity," Martinez, an associate professor of sociology at the University of Utah, said.

She serves on the boards of Zions Bank, Salt Lake Legal Defenders and the Inclusion Center for Community and Justice, researching race and class in society, among other areas.

In Salt Lake City, researchers measured economic growth by the change in the number of jobs available and how much income people made at those jobs. Inclusion was measured by the change in the ratio of households with incomes in the 80th percentile compared to those at the 20th percentile, and a change in the number of people in poverty.

During the past 30 years, the Salt Lake metropolitan area saw 52.8 percent fewer individuals living below the poverty line, compared to 33.7 fewer nationwide, according to the Program for Environmental and Regional Equity at the University of Southern California, directed by Pastor. Research also showed a 16.5 percent increase in earnings in Salt Lake, versus 13 percent nationally.

The same researchers found a 125.7 percent increase in employment in Utah, while the rest of the country averaged 70.2 percent.

Salt Lake was behind national levels in its income gap decrease at 8.5 percent, where the U.S. saw a 12.2 percent decrease.

Pastor and colleague Chris Benner, professor of human and community development at University of California Davis, also studied communities' ability to have conversations and shared knowledge across religious, race, economic and business lines.

"Knowing together is the first step to growing together," Pastor said.

They met with community and religious leaders in Salt Lake City earlier this month to get a clearer idea of the factors behind Salt Lake's inclusion. The researchers met with almost two dozen representatives from religious, civic and government organizations in Salt Lake City.

Community outreach

Comunidades Unidas was one of the organizations of interest in Pastor's and Benner's research. This community outreach organization works to create shared meaning and connections between immigrants and the community they are joining as part of the Welcome Utah initiative.

"We put a face to immigration," Luis Garza, executive director of Communidades Unidas, said.

The group recently partnered with Salt Lake Community College to collect and share stories of immigrants, and has planned a bus tour that will take residents from the east side of Salt Lake Valley to eat at restaurants on the west side of the valley.

Envision Utah, which facilitates development projects across the state, was also part of Pastor's study.

In an effort to understand how each community wants to develop, Envision Utah conducts planning meetings for stakeholders, uses online surveys, hosts community workshops and walks around neighborhoods to hear as many voices as possible.

Envision Utah's work has been invaluable in bringing together voices throughout the community to build a shared vision of the future, Benner said.

Church involvement

The Church of Jesus Christ of Latter-day Saints has also been valuable through its welfare assistance programs, Benner said. During their time in Utah, Benner and his colleagues toured the Humanitarian Center and Welfare Square in Salt Lake City, hosted by Elder Richard Hinckley, his wife Sister Jane Hinckley and Envision Utah.

Salt Lake's job availability has increased across wage sectors, according to research from the Program for Environment and Regional Equity at the University of Southern California. Low wage jobs increased by 62 percent, middle-wage at 59 and high-wage at 57 percent. This is different from national trends, Pastor said, which have growth in low- and high-wage jobs, but not in middle-wage.

Earnings per worker in Utah also run contrary to national trends, Pastor said. Where Utah shows the most increase in earnings per worker for low-wage jobs at 28 percent, followed by middle-wage at 24 percent and high-wage at 23 percent, nationally, high-wage jobs see the most income increase.

Pastor and Benner found that greater wage inequality led to slower economic growth, whereas less inequality led to faster and more sustainable economic growth.

"Inequality is associated with under investing in each other and that makes us less competitive," Pastor, a professor of sociology at the University of Southern California, said. "Lots of inequality, lack of social coherence and racial segregation creates societal tension over who will win and who will lose. It makes us less likely to cohere on what we need to do and thrive."

The Utah Compact

The Utah Compact has also influenced the growth and inclusion in Salt Lake, Pastor said, because it brought diverse voices together. Business, civic, religious and immigration rights leaders came together to "have a civil conversation around immigration that recognizes that people are human beings in families," Pastor said.

As organizations and individuals connect throughout a region, they not only grow more quickly than other areas, but they actually avoid recession, Benner said. However, there are societal factors that can hinder this growth.

During the past 30 years, Benner said, people have been segregating into neighborhoods that reflect their income levels and voting patterns. In addition to this, media can be consumed on line in ways that allows for someone to solely consume information that matches their own opinion and interests. This has led to what he calls a "fragmented knowledge society."

"The world is getting complex enough and the world is getting diverse enough that we need to be coming up with solutions that will work in the long run," Benner said.

Pastor and Benner co-authored the book "Just Growth," the first wave of research looking into inclusion and prosperity in the United States. Their visit to Salt Lake is part of their second wave of research.

Creating and maintaining shared conversations between groups will be important to Salt Lake's continued economic growth, but it does not represent the full economic picture, Lowell Glenn, associate professor of finance and economics at Utah Valley University, said.

Factors such as the state's business-friendly environment and its current similarity across economic, religious and racial lines contribute to Utah's economic success as well, Glenn said.

While the minority population is growing in Salt Lake, the area is still "homogeneous and the result is you don't have that income disparity in the Salt Lake area," according to Glenn. He said he hopes the shared conversations and inclusion will continue as Utah becomes more diverse.

Email: wevans@deseretnews.com

Twitter: whitevs7

1. Dixie Dan
Saint George, UT,
May 27, 2013

Why not compare the average weekly wage in Utah with the surrounding states? It would be nice for the Governor to comment why Utah has the lowest funding of education in the USA.

2. Pragmatic
Salt Lake City, UT,
May 27, 2013

Interesting and a valuable article. However I am sure this will upet and rile the many tea party folks in utah. They don't like this kind of stuff. Dont' talk the virtues of the Utah Compact with them! They will shoot you down every time.

3. Hamath
Omaha, NE,
May 27, 2013

Here's an explanation for one reason why Utah has the lowest funding of education (per pupil... that is vital to understand) in the USA.
There are a lot more kids per household in Utah than other places.
Consider two scenarios: Utah and Non-Utah. Say both have 100 square miles of city and generate say the same amount of money. Both have 75% of their areas covered with houses and 25% business. But in Utah, that 75% all have on average 3 kids (instead of the national rate of w/o Utah of below 2 which is happening in the non Utah place) then you've all things else considered equal you've got to take that total amount of property tax but in the Utah case you've got to split it among more kids. So the funding per pupil is lower.

4. Truthseeker
May 27, 2013

"The American Legislative Exchange Council"

The American Legislative Exchange Council (ALEC) is a 501(c)(3) American organization composed of legislators, businesses and foundations which produces model legislation for state legislatures and says it promotes free-market and conservative ideas.

This is the 2nd article in as many days referencing ALEC.

Does DN have a deal with ALEC? Are UT legislators members of ALEC?

Corporate lobbyists and state legislators work to write laws behind closed doors. State legislators receive “scholarships” to attend conferences sponsored by corporations where presumably, some of these model bills are discussed.

ALEC has written thousands of bills--which then get rubber-stamped by state legislators.
Bills ALEC has written include voter ID laws, laws blocking climate change legislation, bills promoting guns rights, bills reducing corporate taxation and limit corporate liability etc. etc. etc.

What corporations are writing ALEC legislation? American voters ought to know. Why should legislators be members of a secret organization?

On another note:
According to U.S. Census Data, UT is #8 with the lowest percentage of minority population so it ought to be compared to similar homogenous states. UT is also near the bottom in per capita income.

5. JayTee
Sandy, UT,
May 27, 2013

Some states obviously have an "open-arms" and "sanctuary" policy for those who want to milk and enjoy the economy without really contributing much. Utah has managed to buck the trend here somewhat, and avoid some of the programs and policies that encourage people to ride the system without pulling much weight. We still have a long way to go, but thank goodness we're comparatively atypical in that regard.