Workers in El Paso County are finally seeing raises above the inflation rate after years of paltry gains in the wake of the Great Recession. The boost accompanies a tightening job market, a new report shows.
The $40 increase in the county’s average weekly wage to $976, or $24.40 an hour, from a year earlier, or 4.3%, is more than double the nation’s 1.8% rate of inflation for the same period, according to data released Tuesday by the U.S. Bureau of Labor Statistics. Local wages have risen by 4% or more for three consecutive quarters and four of the past five quarters.
The gains come as the unemployment rate in the Colorado Springs area has dropped steadily this year to a 2-year low of 3.2% in September and is nearing the lowest level reached in the past 20 years. Local wages hadn’t increased more than 2.4% a year until 2017 even as employment grew at strong 3% annual rates in both in 2015 and 2016, the agency’s data show.
Employers in El Paso and Teller counties are struggling to fill job openings of all types and are increasing wages as a result, said Traci Marques, executive director of the Pikes Peak Workforce Center.
“It is still tough for employers to find candidates for job openings, especially in rural areas like Teller County. The number of openings significantly exceeds the number of people looking for work,” Marques said. “Many employers struggle to find employees that fit their culture and openings they have. We are seeing this at all levels and sectors of the workforce.”
Every major industry sector posted gains from a year earlier except for manufacturing and mining with the biggest increases coming in administrative and waste services, which includes call centers; retailing and accommodation and food services, which includes hotels and restaurants, all more than 5%.
Despite recent increases, local wages still remain 12.3% below the national average and 14.2% below the statewide average. During the April-to-June period, wages in El Paso County grew more slowly than the state, which rose 4.9%, but faster than the national average, which increased 3.2%. The local cost of living climbed above the national average during the second quarter for the first time in nearly 20 years.
“While wages increasing faster than the national average is really good news, it will take years to catch up with the rest of the nation but hopefully just two or three and not 10,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. “I am really glad to see this level of wage growth.”
At the same time wages were climbing, local job growth is accelerating. The number of people holding jobs rose by nearly 7,000, or 2.5%, from a year earlier. That is the strongest job growth since the first quarter of 2017 with more than half of the gains coming from three major sectors — health care, professional and business services (which includes most defense contractors) and construction. Retailing posted the only significant decline.
The wage and job growth numbers are compiled from unemployment insurance reports that most employers must file every three months. They are a more accurate measure of the county’s job growth than the bureau’s monthly data, which is based on a survey of employers. The local unemployment rate comes from a survey of households; October numbers are scheduled for release Wednesday.