The severity of the recession and the sluggishness of the recovery cycle have raised a number of concerns about the Colorado economy. The most notable is the lack of job creation in Colorado in recent years compared to past decades. Economists and policymakers alike have noted that the state added roughly 767,000 new residents between the 2000 and 2010 Census counts but the number of wage and salary jobs remains below the level from a decade ago. This mismatch between job growth and population growth the past ten years has led many to dub this period as Colorado ’s Lost Decade.
The Lost Decade phenomenon is not unique to Colorado . The same ten-year job loss is present at the national level and, in fact, the ten-year decline is slightly less severe in Colorado than at the national level. The decline in the state’s workforce over the past decade likely says more about squeezing two steep recessions into a single decade than it does about the state’s long-run ability to create jobs.
A puzzling aspect of the Lost Decade question is why new residents continued to migrate into Colorado in such large numbers during the recent recession despite an extremely weak job market in the state and sharply reduced migration nationally. Perhaps the strong migration numbers are due to Colorado ’s relatively stable housing prices and a job market that was no worse than most of the rest of the country.
Does the inability of jobs to keep pace with population the past decade bode poorly for Colorado going forward? Not necessarily. Economic research tells us that, over the long haul at least, broad population movements determine the number of jobs in a state. The ability to generate jobs for large numbers of new residents is one of the hallmarks of high net migration states such as Colorado .
So what can we conclude about the Lost Decade? First, that it is a national phenomenon that largely reflects the severity of the job losses in the two recessions of the 2000s. For Colorado , the decline is actually less severe than in most areas of the country. Second, along with a ten-year job decline in the state, there has been a marked slowing in the job creation ability of the Colorado economy the past three decades. While this raises concern about the rate at which the state will add jobs going forward, the state has continued to add jobs much faster than the nation during recent expansions. And, third, the best evidence to date confirms that new residents are still moving to the state in large numbers. On balance, it suggests that Colorado remains a high-growth state - albeit one with a slowing rate of job creation - that happens to have an excess supply of new residents/workers at the moment. This mismatch may put upward pressure on the state unemployment rate and possibly dampen migration into Colorado over the next few years, but in the long run, not a bad problem to have in a fast-growth state.
Rocky Mountain Economist
Prairie Gateway re-branded to Victory Crossing {Commerce City}
Commerce City "We need to be sure that we are not left behind in ED..."
Will we ever see Development @ the Prairie Gateway site in Commerce City, CO??? It has been years since the Commerce City Civic Center and Rapids stadium have been built and still no economic development. I guess patience is really a virtue.
