Colorado’s economy isn’t nearly as strong as Gov. Hickenlooper says it is

Photo: Joe Amon/The Denver Post

 

Everyone expected Colorado Gov. John Hickenlooper’s final State of the State address to be something of a victory lap — a bookend to a governorship widely regarded as a success, marked by social progress and soaring growth and investment.

But perhaps not everyone realized quite how boastful Hickenlooper was going to get.

“By nearly every measure, Colorado is perhaps stronger now than at any point in history,” he told lawmakers at the state Capitol on Thursday. He spoke as rapturously about Colorado’s natural beauty as he did about his administration’s accomplishments in his seven years as governor.

“This is an era for the record books,” he added.

Hickenlooper certainly isn’t the only one who thinks this. The narrative of Colorado’s economic boom is inescapable; we’re reminded of it every time another crane goes up in downtown Denver, every time another Boulder startup raises a new round of capital, every time the data shows a new record number of transplants flocking to the Front Range from out of state.

But a new report from the Bell Policy Center, a Denver-based think tank, takes a comprehensive look at how Colorado’s “booming” economy is working for many low- and middle-income people. And not all of its findings match up with the cheerful picture Hickenlooper painted on Thursday.

The center’s “Guide to Economic Mobility in Colorado” depicts a state where too many people are being squeezed by costs that are rising too fast and wages that aren’t rising fast enough — and where government isn’t doing nearly enough to help.

“The forces of shifting demographics, economic inequality, shrinking public investments, and technological change make economic mobility a steep uphill climb,” says the report.

Despite some encouraging year-over-year growth in 2017, wages have been largely stagnant in Colorado over the last two decades, the report found. When adjusting for inflation, the state’s average weekly wage has risen only three percent since 2000, failing to keep pace with the many other economic indicators that have soared during that period.

Making things worse, Coloradans unable to keep up with rising living costs can no longer count on the level of government assistance they once could. This year, Colorado’s spending on public services will account for less than four percent of its economy — “a smaller portion than at almost any time in the past 40 years,” according to the report. A lack of public investment in things like education and child care further raises the costs working Colorado families must pay to simply get by, much less get ahead.

The report also shows a stark divide between the Front Range urban corridor and Colorado’s rural areas. Nearly all of the state’s recent population growth is accounted for by ten counties along the Front Range; meanwhile, the population in at least 25 rural counties declined between 2010 and 2015. Many rural communities, particularly in south and southeastern Colorado, are suffering from significantly higher rates of poverty and unemployment.

Finding real solutions

Hickenlooper’s address didn’t ignore these challenges entirely, but some of his talking points and policy prescriptions cast doubt on whether he fully understands their nature and scale.

“By almost any measure, we’ve become one of the best places for business in America,” he said.

That’s undoubtedly true, if by “business” we mean executives, investors, and owners of capital. It’s a great time to be an oil and gas CEO or a startup whiz with access to seed money in Colorado. Hickenlooper, who made millions as a restaurateur before being elected mayor of Denver in 2003, spent much of his speech on Thursday preaching the gospel of entrepreneurship and innovation. He touted a number of economic development initiatives, including a new $10 million “Rural Venture Fund” meant to “incentivize companies and rural entrepreneurs.”

But whether in rural Colorado or elsewhere, solutions like that one are aimed at the top of the economic ladder, not the working class. No matter how “incentivized,” most Americans are unlikely to ever have the means to start their own business — nor should they have to. And hoping that the prosperity enjoyed by tech investors and other business owners trickles down to working families isn’t much of a solution at all.

For its part, the Bell Policy Center recommends a number of reforms aimed squarely at helping low- and middle-income Coloradans get ahead. They include creating a public family leave program, expanding investment in early childhood education, implementing pay equity measures, and amending TABOR, the constitutional provision that for more than 25 years has limited taxation and public investment in Colorado.

The report warns, too, that current trends and looming threats like automation could lead to even more hardship over the next two decades. As many as 477,000 Coloradans, most of them in low-wage jobs, are at risk of being affected by technological upheaval.

The dissonance between the governor’s triumphant speech and the report’s troubling conclusions suggests a change is needed in the way we talk about economic conditions in Colorado.

Local politicians and journalists tend to frame stories about stagnant wages as exceptions to the rule. Given that Colorado’s economy is so strong, they ask, why aren’t more people reaping the benefits?

But it makes a lot more sense to ask that question in reverse: If so many people aren’t reaping the benefits, why do we think Colorado’s economy is any good at all?

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