Thursday’s economic forum, an annual event sponsored by Wells Fargo Bank, provided multiple insights into Colorado’s and La Plata County’s economy. Housing costs, less-than-adequate wages and population growth, and how all three intersect, were at the center of the presentations.
Colorado’s job growth is twice the nation’s, but it is no longer in the top five among the states; it is now in the top 10. Housing costs in the booming Denver metropolitan area? Again, in the top 10. And the highest of any state “without water.” Only states with coastline rank higher.
High housing costs impact the economy, too. There was a reference to two companies which had decided not to relocate to the Denver-Boulder area because of housing costs. Their employees would not be able to afford to live there.
And, another way to look at housing prices is whether housing is affordable. In La Plata County, 35 percent of residents reportedly are “burdened” by rent costs. Statewide, housing prices have increased four percentage points more than has the consumer price index.
At the same time, for those who own their homes in La Plata County, in the aggregate, prices have not reached the 2007 pre-recession values. Durango’s may have, but not countywide. They are shy about 15 percent (but on a positive note, the number of days on the market has declined).
As to population growth, Colorado – and La Plata County – are seeing an influx of residents who are not a part of the workforce. They are likely older and retired. But their presence requires a larger workforce, particularly in services and health care, one that is falling short.
The population is growing faster than the workforce, and the workforce does not always have the right skills. Prior to the 2007–08 recession, 60 percent of the adult population was in the workforce; it is 54 percent now.
Housing costs have risen significantly faster than wages. Statewide, two thirds of the new jobs are lower-paying trade, transportation, services, recreation and arts positions. Better-paying jobs come from natural resources and corporate headquarters.
Younger, less-experienced workers, at lower wages, are replacing older, experienced workers. Percentagewise, there are fewer “value added” jobs which pay better.
Adjacent to Colorado, economies in Utah and Texas are doing well. The economy in Kansas is just coming back, and Wyoming’s has dropped.
Nationally, even though consumer confidence is high and business confidence is “euphoric,’ 2 to 2.5 percent GDP growth should be expected rather than the 3 percent touted by the White House.
What is constraining La Plata County and the population centers in Colorado are no different: wages are too low and housing costs are too high. How to increase one, and reduce the other, will be the challenges in the years ahead.