By Lyndsey Stram, regional economist, and Mark Knold, chief economist
Salt Lake City’s downtown is home to Utah’s largest employment center. It employs workers not just from Salt Lake City but from a broad reach up and down the Wasatch Front. The downtown’s economic vitality draws workers to its high rises and government centers. In turn, these workers impart their consumer vibrancy by supporting and sustaining a myriad of business and industries within and surrounding the downtown’s business heart.
As the COVID-19 pandemic has negatively impacted the global economy, downtown districts in cities across the U.S. have been disproportionately depressed, including Salt Lake City’s. While in normal times downtowns regularly thrive with worker influx, COVID-19-induced worker dispersion has disproportionally emptied out business centers. These have a negative secondary and tertiary diffusion upon restaurants and shops that magnifies the situation. Because the extent of this impact is unknown, it’s helpful to have an idea of what the employment picture looked like before the pandemic and therefore from whence it may have fallen.
The Downtown Salt Lake City Alliance defines downtown with the following bounds: North Temple, 600 West, 400 South and 300 East. In the fourth quarter of 2019, there were approximately 47,700 jobs in this downtown rectangle. Utah statewide employment of the same period was 1,590,800, showing the downtown employs 3% of the total statewide workforce.
The graph segments downtown employment by industry. Professional/scientific/technical services has the largest share at 16.4%. Finance and insurance also has a large share at nearly 15%. Management of companies accounts for another 12.7%.
The following table is a list of the largest downtown employers in 2019’s fourth quarter. These various entities fall within multiple industry sectors. Based on the large share of finance employment, it’s not surprising that four of the 10 are banking/finance related. The Church of Jesus Christ of Latter-day Saints (LDS Church) is the largest downtown employer.
A large share of downtown employment can be considered general office work, the kind that lends itself favorably to teleworking when necessary. Such jobs are prevalent in the large downtown industries of finance, professional and technical services, management of companies, administrative support, other services, and public administration.
According to data released in June 2020 by the U.S. Bureau of Labor Statistics, 33% of the total U.S. workforce, 25 years and older, worked at home because of displacement resulting from the COVID-19 pandemic. This percent increases among workers with higher educational attainment; 54% of those with a bachelor’s degree and higher worked from home because of the pandemic. Considering that many downtown work settings employ higher-educated workers, a sizable amount of downtown Salt Lake City employment is probably still working. The catch is, they are not working in their downtown environs.
Rough estimates place normal downtown office employment at around 34,000. The extreme case would be that all of them are no longer working downtown, but that is probably too extreme. However, given that office work can transition to telework more realistically than can many other employment arenas, this employment segment can be sizably missing from the downtown environment even if it is not missing from the overall Utah payrolls.
The actual number of missing workers becomes a matter of conjecture. One can make estimates of missing workers by sliding down a percentage scale. An 80% worker reduction would be around 27,000 absent workers; 75% would yield 25,500 absent workers; 60% 20,400, and so on. The certainty of how many are actually missing may never be determined. Payroll records reported to the Department of Workforce Services through the Unemployment Insurance program will not reveal it, as workers can and will be reported as employed, even if most of them are doing it from their homes.
More than 9% of downtown employment belongs to the restaurant industry. Much of this was likely displaced due to COVID-19 restrictions; and, even as the dine-in restrictions are lifted, if employed office workers and others don’t return to the downtown area, the restaurant industry will certainly continue to be negatively impacted.
Not all of the downtown’s economic setback is centered upon missing workers. Tourism and conventions also bring visitors and spending downtown during normal times. Due to travel restrictions and ‘stay home, stay safe’ guidelines, hotel occupancy and retail spending likely dried up significantly. With office workers missing from downtown, business trips into the downtown are also missing, as are conventions and other business interactions.
People are traveling and staying in hotels — just not downtown. The Utah Jazz are playing basketball — just not downtown. Government workers continue to toil and the legislature still meets — just not downtown. Salt Lake City’s downtown is generally quite vibrant and gains vigorously when the economy is conventional. Yet, with COVID-19, the downtown economy has become dismembered and Salt Lake City’s downtown stands to lose disproportionally.