Wages earned in El Paso County last year rose at the fastest rate since 2007 as a tight labor market left many employers competing for a shallower pool of applicants, according to fourth quarter 2017 data released Wednesday by the Colorado Department of Labor and Employment.
The 3.6 percent increase from 2016 also was at least partly due to nearly $14 million in "golden parachute" payments to executives of Spectranetics Corp. after Royal Philips acquired the Colorado Springs-based medical device manufacturer for $2.2 billion.
The two sectors of the local economy posting the biggest wage gains were management employees and manufacturing, both of which likely were inflated by the Spectranetics buyout because nonmanagement employees may have cashed in stock options before the deal was completed, or received bonuses to remain afterward.
Last year's rise in the average weekly wage to $941 was up from a 2.3 percent gain in 2016 and was the biggest percentage increase since wages rose slightly faster in 2007, the department said. Wages have risen every year this century except for a $1-a-week decline in 2013 but have been slow to post gains much above the inflation rate. Average wages for management employees rose 23.5 percent and manufacturing workers wages jumped 19.5 percent. When the increases in management and manufacturing wages are subtracted, wages earned by all other employees rose 2.4 percent.
"Since we know that local wages are significantly behind the rest of Colorado and the U.S., we will need wage appreciation at a higher rate in order to close" the gap between local, state and national wages, Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum, said in an email.
Ryan Gedney, the labor agency's senior economist, said the wage gains were "broad-based across all sectors of the Colorado Springs economy," even with the huge gains for management-level and manufacturing employees. "We have been looking for gains like this as the labor market gets tighter. I would expect this will continue this year."
Tom Binnings, a senior partner in Summit Economics LLC, a local economic research and consulting firm, believes that average wages have been slow to increase nationwide because younger workers entering the job market are replacing higher-paid employees who are retiring.
The wage gains came despite a slowdown in the county's job growth. Employers added 6,334 jobs last year, a 2.4 percent growth rate from 2016, down from 7,742 jobs, or a 3 percent growth rate, in the previous year, and 8,004 jobs, or a 3.2 percent growth rate in 2015.
That's likely because the unemployment rate for the Colorado Springs area, which includes El Paso and Teller counties, fell to an average of 3.3 percent in 2017, down from 3.7 percent in 2016 and the lowest annual jobless rate since 2.9 percent of the area's residents were out of work in 2000.
Nearly two-thirds of the county's job growth last year came in the health care, construction and accommodation and food service sectors, which each added at least 1,350 jobs. The information, retail, utilities and administrative and waste services sectors all shed jobs, compared with 2016.
The job growth numbers are compiled from unemployment insurance reports that most employers must file every three months and are a more accurate measure of the county's job market than monthly data released by the Bureau of Labor Statistics, which is based on surveys of employers.
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