Utah’s Department of Workforce Services recently began an incentive program for small businesses that will provide reimbursements of between $3000 and $4000 for training costs associated with the creation of new, year-round jobs.
The program, called The Small Business Bridge Program, is geared towards businesses that are planning on increasing their staffing levels. It hopes to encourage businesses to take on more full time employees. By setting the minimum salary for the sponsored positions at 80 percent of the average wage for the county, the state is hoping to increase mid-level, rather than entry-level, jobs.
“The program is designed mostly for companies that operate year-round, or for businesses that operate year-round but adjust employment seasonally,” said Kelly Thornton, a workforce development specialist at Moab’s Department of Workforce Services office.
The challenge the Bridge Program may face in Moab is that the vast majority of the town’s economy is dependent on tourism, which has an on and an off season.
However, each year that season is getting longer and longer and the numbers of visitors coming to the area in what used to be considered the off-season is increasing.
This year’s Transient Room Tax revenue (a 3 percent tax on all short-term room and private campsite rentals) was up 12 percent over 2011. Sales tax numbers were up 5.2 percent over the same period last year. So while more people are coming to stay in Moab, they are not spending as much money on retail as they once did.
“With the economy so focused on tourism, almost all businesses have to cut down (their staff) in the winter,” said Ken Davey, the City of Moab’s Administrative Analyst/Economic Development Specialist. “Twenty years ago nothing was going on in town until mid-March, and the late season ended in October. That’s changed,” he said.
Davey believes that this shift may allow more local businesses to take advantage of the Bridge Program.
In addition to the longer season, businesses may actually end up saving more money by keeping employees on for the whole year than by laying them off during the winter months. The savings comes from the lower payments businesses would have to make towards unemployment insurance if they have more year-round employees. Though the formula for calculating how much businesses pay towards unemployment insurance is complicated, in general, the longer an employee is kept each year, the less the employer has to pay.
At first glance the Moab numbers for unemployment can seem paradoxical; two of the last three years annual average unemployment has been over 10 percent, up from previous years and well above the national average, while the overall economy has been growing.
The reason for this is the seasonal nature of the economy.
“There are more jobs in the spring and summer than there used to be, so unemployment is up because those jobs go away in the winter,” Davey said.
The numbers from Utah’s Department of Workforce Services clearly show this. In June of 2000, 5,123 people were employed in Moab. By June of 2006 that number was 5,661, and this year it was 6,181. By contrast, the growth in employment during the winter months, though existent, has been much slower.
“In January and February we have probably about six servers that work almost full time,” said Vanessa Scow, a manager at Zax, a popular restaurant on Main Street. “But in the middle of summer we usually have between 15 and 20 servers.”
Though most of Moab’s businesses are very closely tied to the laws of supply and demand in the tourism industry, there are several exceptions.
“These sorts of programs absolutely help in hiring,” said Patrick Neff, the VP of finance and administration at The Synergy Company, an organic health supplement company based in Moab. “It helps us in terms of retention and helping develop our employees and increase their contribution,” he said.
Synergy has also used a similar government workforce development program in the past; Custom Fit, which partially subsidizes company’s training programs.
Counter to the implicit assumption of the Bridge Program, Neff believes that the seasonal nature of employment in Moab is actually something that many residents like.
“It can be a challenge to find employees in Moab. It seems that there are quite a few people in the local workforce that don’t want to work year-round,” he said.
But while many of Moab’s residents may enjoy having a few months of the year off, the city and state want to make sure that the opportunity for full-time work is there.
“If we begin more mineral extraction (the types of employment available in Moab) could change,” said Davey. “There is big potential for potash development in the next couple of years and that could turn things around.”
