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Colorado is 45th in nation for '07 with 3.9 percent

By James Paton, Rocky Mountain News (Contact)

Wednesday, March 26, 2008

Telecom employees and architects with lackluster raises. Immigrants and inexperienced twenty-somethings moving to Colorado. Workers leaving large companies behind for startups.

All of those may have contributed to income levels in Colorado last year rising at one of the weakest rates in the country.

Colorado ranked 45th in the nation in 2007 as per capita income grew 3.9 percent, preliminary Bureau of Economic Analysis figures showed. That compared with a 5.2 percent gain for the entire United States.

Nevada and Arizona, hurt by a slowdown in home construction, ranked 47 and 50, respectively.

Colorado has added jobs at a decent pace, but "the growth in wages has not been commensurate with the growth in jobs," said Fred Crowley, an economist with the University of Colorado at Colorado Springs.

Crowley said that in his region, El Paso County, small businesses have sprouted and created new positions as large companies have faded from the scene. The problem: They have paid less than the big guys, he said.

In the information and professional and business service sectors, some jobs don't compensate like they used to, he added.

Like other states with relatively brisk population growth, Colorado struggled to boost per capita income. The figure is a calculation of total income - including wages, rents, dividends and interest - divided by the state's total population.

Georgia, Arizona, Nevada, Idaho, North Carolina and South Carolina are among the other states that had both fast gains in population, compared with the U.S. average, and anemic per capita income increases.

The figures show that Colorado has seen an influx of people earning more modest sums, said Martin Shields, an economist at Colorado State University. That could mean young people or immigrants who, on average, make less than native workers.

On the national level, U.S. income in the fourth quarter merely kept pace with inflation.

"That says the U.S. economy really hit the brakes," Shields said. "Whether or not we're in a recession hasn't been officially determined, but there certainly has been a slowdown and, if that continues in 2008, it wouldn't be a surprise."

Colorado's 3.9 percent increase in per capita income last year compared with a 5.0 percent gain in 2006.

Despite the lackluster result, Colorado remained 10th with per capita personal income of $41,042. A year ago, the state was believed to be the eighth richest by that measure, but it dropped two notches after the government revised the data.

Looking at the report another way, Colorado had the 29th-fastest increase in total personal income. That's a rise of 6.0 percent, only slightly less than the national average of 6.2 percent.

Crowley said Mississippi, as an example, recorded one of the fastest increases in per capita income growth last year - 6.7 percent - but it's easier to post such a large percentage gain when you have a small population base.

Mississippi stayed 50th in the nation with per capita personal income of $28,845.

But Colorado cannot use its wealth as an excuse for a feeble rate of growth.

New York had the fourth-highest income and second-fastest population growth, while Connecticut was first in income and had the fourth-fastest population growth.

patonj@RockyMountainNews.com or 303-954-2544