What a difference a few years can make.
Not so long ago, the only job announcements in this market were for call centers, and the few places seeking help were for low-salary or entry-level positions. Colorado Springs City Council and the mayor’s office were in open conflict, and the Regional Business Alliance was trying to find its way as a combined economic development agency and local business supporter.
Contrast that to 2016. Unemployment is at 4 percent in the city, and the statewide rate is lower than the national average. The National Cybersecurity Center has received its first round of state funding and is seeking a CEO. At a recent event, Mayor John Suthers announced the city created 7,800 jobs during the past year — many of them high-paying tech jobs.
It’s all good news.
But that doesn’t mean Colorado Springs doesn’t have to compete with its neighbors to the north: Denver, Boulder and Fort Collins. And in one vital measure — wages — we lag behind all three.
Young professionals complain that wages are stagnant in Colorado Springs — and they fall behind salaries offered for similar jobs in other parts of the state. It’s not just new college graduates, either. Seasoned professionals also say that salaries are a major factor in their decisions whether to stay in Colorado Springs. And some choose to work in Denver and commute from the Springs — something that keeps some of them from being fully involved in the community.
According to the Pew Institute: “In real terms, the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.”
And Pew says that the biggest gains have gone to higher-end workers: “What gains have been made, have gone to the upper income brackets. Since 2000, usual weekly wages have fallen 3.7 percent (in real terms) among workers in the lowest tenth of the earnings distribution, and 3 percent among the lowest quarter. But among people near the top of the distribution, real wages have risen 9.7 percent.”
Even as employment increases, the buying power of the middle class remains stagnant. As the business community continues to work together to attract companies and become the cybersecurity capital of the United States, paying salaries to attract the right kind of workforce is vital.
Adding to the problem, Millennials are graduating with staggering student debt burdens. If Colorado Springs wants to keep young professionals in the city — living, working and playing here — it’s essential to pay them enough so they can afford to remain here.
Some economists say that wages always fall after a recession, but the city is well into its recovery mode now.
So how can Colorado Springs fix the problem?
Some economists believe that building more homes will give people more buying power, since the rising costs of rents and increasing home prices take up much of a middle-class family’s budget. More homes to equal increased demands will lower home prices.
Others say that repealing the North American Free Trade Agreement would help American workers, while still others want to remove the government’s social safety net in order to give people more incentives to work. A few economists say giving people more money from the government is the solution — in terms of tax breaks or earned income credit for the middle class.
But perhaps the answer lies in workforce development, because we keep hearing that manufacturers would hire more at good salaries if qualified workers were available. Increasing educational opportunities for the right kinds of jobs will raise wages for those positions — and in turn, people will have more buying power to spend at retail stores, restaurants and tourist attractions. Once those companies are doing well, they’ll promote employees and provide better salaries.
It’s an indirect way to influence salaries, but it might be the most successful path. The Springs already is taking advantage of the latest tech movement through its cybersecurity recruitment efforts.
After all, a rising tide lifts all boats.