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State's recovery steady, not strong

By: name newspaper
June 29, 2015 Updated: June 29, 2015 at 4:10 am
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Colorado's recovery is averaging better than the nation's as a whole but still has some weaknesses.

The study State of Working Colorado 2014 published by the Colorado Center on Law and Policy says, "Colorado is one of only 16 states to have recovered all jobs lost since the 2007 recession," but it has not created enough jobs to match the pace of the growing population. To do so, it would need to create 152,238 more jobs. For May 2015, the unemployment rate from the Bureau of Labor Statistics stood at 4.3 percent for Colorado, lower than the national average of 5.5 percent.

Simultaneously, however, though the number of low- and high-income jobs has increased, the count of mid-wage jobs decreased by 25,500 between 2007 and 2014, the same study said. The Colorado Fiscal Institute reported in January 2014 that the income of the poorest 20 percent decreased by 11.7 percent and the income of the middle 20 percent increased only by 2.0 percent whereas the income of the richest 20 percent rose by 13.9 percent from the 1990s to the 2000s. This agrees with the finding of the State of Working study that real median household income in Colorado fell by $3,200 from 2007 to 2013. Wage growth has also been hurting. According to the State of Working 2014 study, between 1979 and 2013, individuals in the 20th percentile only saw a wage increase of 2.2 percent, "middle-wage earners" witnessed an increase of 8 percent, and those at the 80th percentile saw a wage increase of 25 percent.

Now, there are some caveats to this narrative of wage stagnation. As scholars Donald Boudreaux and Mark Perry wrote in 2013, though wages may have fallen, the purchasing power of those wages has increased: "According to the Bureau of Economic Analysis, spending by households on many of modern life's 'basics' - food at home, automobiles, clothing and footwear, household furnishings and equipment, and housing and utilities - fell from 53 percent of disposable income in 1950 to 44 percent in 1970 to 32 percent today."

That said, the Working study also notes that in 2013, the poverty rate for Colorado stood at 13 percent, which was still higher than both the 12 percent level from before the recession and the 8.7 percent level from 2000.

Overall, while Colorado has made progress in recovering from the Great Recession, more progress is needed before it can truly be counted a booming economy. - The Gazette

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