Economic divide

SAME DATA, DIFFERENT PICTURES OF STATE ECONOMY DEMOCRATS point to a rising GDP in Colorado and a low jobless rate REPUBLICANS say median incomes lag and labor participation is down

Republicans trying to unseat Democrats in the race for Colorado governor and the U.S. Senate have made the economy a battleground — even if it means fighting uphill.

They argue things would be better under their watch and highlight rising inequality, typically a Democratic tactic. Democrats, meanwhile, urge patience for the strong job gains along the northern Front Range to trickle out to other parts of the state.

“The No. 1 priority for our state government to speed recovery statewide is to honestly look at those regulations that have a negative impact on job creation and get rid of them,” argues Bob Beauprez, who is trying to unseat Gov. John Hickenlooper, a Democrat.

To drive the point home, he notes that in Utah, where Republican Gov. Gary Herbert has taken a more hands-off approach to business regulation, the economy has performed better than Colorado’s.

Hickenlooper defends his record by citing the big drop in Colorado’s unemployment rate during his watch and the state’s top ranking for job growth — gains achieved despite the drag of major floods and fires.

“It’s ridiculous to say that we’re not succeeding compared to our neighboring states,” he countered in a Denver Post-sponsored debate.

That both candidates — former business owners— would promote their ability to bring more jobs to the state isn’t surprising. But the economy is too complex to capture in 30second campaign ads and debate one-liners.

“When you see things improving, when you see job growth, the general psyche of the voter is positively influenced by that. I do think the economy has a role in elections,” said Richard Wobbekind, an economist with the University of Colorado at Boulder Leeds School of Business.

The more that voters perceive that things are stable or good, however, the more room it allows for social and “freedom” issues — from gun control to women’s reproductive rights— tomove to the forefront, Wobbekind said.

The Denver Post analyzed how Colorado has performed on several economic measures from December 2010, right before Hickenlooper took office, through August, or the most recently available data.

In terms of jobs created, Colorado ranked fourth among all states with a 9.6 percent increase, which translates into 214,700 new jobs added, according to the U.S. Bureau of Labor Statistics.

Colorado’s unemployment rate has fallen from 9 percent to 5.1 percent. That decline ranked as fourth-best of any state and the overall rate was the 15th-lowest.

Personal incomes rose 17.2 percent, the fifth-best showing among states. Adjusted for population growth, however, per capita personal incomes rose 11.7 percent, the 19th-fastest rate.

Overall, Colorado’s economy grew 14.7 percent during Hickenlooper’s time in office, the 10thbest showing on state GDP.

Only 15 states have managed to consistently attract in-migration during the recovery, andColorado is a top performer in that group, said Mark Snead, an economist with RegionTrack in Oklahoma City.

“I consider Texas, Utah and Colorado the three standouts,” said Snead. “Those three states have all of the economic development engines firing.”

Colorado’s strong showing compared to other states in the recovery has required Republican challengers to ask voters to look behind the curtains on the numbers and at their own situation.

“I see lots of people I knowin the local community who don’t have full-time jobs, who have part-time jobs. It seems to be the case they can’t find full-time work available to them,” said JohnMcClelland, 62, aWoodlandPark area residentwho took early disability. McClelland said he’ll cast hisvotes forBeauprez and U.S. Rep. Cory Gardner, R-Yuma, who is challenging incumbent Sen. MarkUdall.

McClelland’s point gets at the Republican argument that while the official unemployment rate may be falling, people aren’t finding the kind of jobs or earning the wages they want.

The Liberty Foundation earlier this month released a study looking at the labor force participation rate, which measures the share of people 16 or older, not in the military or prison, who areworking or actively looking for work.

About 73.3 percent of adult Coloradanswere engaged in the labor force in 2006, the year before the recession started. As of August, participation stood at 67.8 percent, levels last seen in the 1970s.

Where did all thoseworkers go? The Congressional Budget Office attributes about half the decline in participation to a rapidly graying population with more people than ever at retirement age.

People also drop out to go to school, raise kids or take disability.

But many frustrated workers have quit looking. The number of the unemployed out of a job for six months or more remains elevated, and too many workers who want full-time work remain stuck in part-time jobs.

During a visit in August toMontrose, a part of the state still struggling economically, Beauprez argued the “real” unemployment rate in Colorado was closer to 11 percent.

“We are 200,000 jobs short,” Beauprez said in a debateMonday, citing how many more jobs the state would have if participation rates had held up at current unemployment rates.

The number ofworkers missing in action is nearly as large as the number of net new jobs added during Hickenlooper’s term and also helps explain the slack that has kept downward pressure on wages.

A recent New York Times analysis found that weekly wages for working and middle-class families, after adjusting for inflation, are lower thanwhere theywere in 2000.

InColorado, median household incomes, adjusted for inflation, rose 5.2 percent during Hickenlooper’s term, which ranks 30th among states.

Still, the attempts by Republicans to exploit economic disparities probably won’t play as well with the Democratic constituencies that usually have the biggest ears for that kind of message.

Lucille Zaffree, 86, of Arvada, said she’s “doing OK” financially, but worries that Republicans might cut Social Security. She plans to vote for Hickenlooper and Udall, also a Democratic incumbent.

“I don’t knowif anybody can do a good job on the economy,” she said, “but theDemocratswill do a better job than the Republicans will.”

The inequality argument is one that Republicans have extended beyond households to regions of the state.

With anunemploymentrate of 5.1 percent, Denver is approaching full employment, and Boulder County is at 3.8 percent unemployment. WeldCounty ranks first amongthe nation’s 339 largest counties for job growth, with a remarkable 7.5 percent increase through the 12 months ending in March.

And yet, large swaths of the Western Slope and southern Colorado don’t look so robust. Pueblo’s unemployment rate has fallen from 10.6 percent to a still-elevated 6.9 percent. In HuerfanoCounty, consistently one of the state’s poorest areas, it has moved from 12.7 percent to 7.2 percent.

“The rural counties are performing substantially below the U.S. average, other than those that are agricultural or mining dependent,” said Martin Shields, director of the Regional Economics Institute atColorado StateUniversity in Fort Collins.

Colorado Springs, although technically on the Front Range, is among the underperformers. Unemployment has moved from 9.8 percent to 6 percent, but the fear of large federal spending cuts haunts the region.

El Paso County is home to four military bases and the target of a massive 1 percent of federal defense spending, which is under pressure. The county still hasn’t replaced the high-paying tech manufacturing jobs lost last decadewhen IntelCorp., Vitese, LSI Logic and Hewlett-Packard, among others, pulled back, Shields said.

Likewise, Grand Junction and Montrose continue to lag, plagued by lownatural gas prices and a decline in coal mining.

But things have started to look up in the once laggard mountain resort counties.

The unemployment rate in Grand County has fallen from 8.5 percent in December 2010 to 3.6 percent in August. In Summit County, unemployment is down from 6.7 percent to 3.8 percent and in Eagle County from8.5 percent to 4.1 percent.

Regardless ofwho wins, Shields said elected officials will need to pay much closer attention to those parts of Colorado that have fallen behind.