The region northwest of Denver got an 18.5% spike in its average weekly wages during the third quarter of 2019 from the year before, according to Quarterly Census of Employment and Wages data.
“I’d say that is a very real underpinning in our Colorado metropolitan economy now is tech companies,” said economist Brian Lewandowski, who heads the Business Research Division at the University of Colorado’s Boulder campus.
For an area like Boulder, wage growth shouldn’t come as a surprise. The region has boasted a steady economic expansion since the Great Recession and an “innovation economy” that’s lured the likes of IBM and Ball Aerospace decades ago and Google and Apple today.
“We’re seeing these Fortune 500 companies with some dimension of advanced technology in their work not only setting up shop here but growing here,” said Clif Harald, executive director of the Boulder Economic Council, the economic development wing of the region’s chamber of commerce.
Going beyond the numbers
Boulder County’s wage growth rate represented the largest increase in the QCEW in 2.5 years and the fourth largest since 2015; however, it’s not uncommon to see dramatic swings in quarterly average weekly wages.
The QCEW data represent total compensation paid, so frequently packed into the quarterly numbers are one-time items like bonuses, severance and stock options. The data can oftentimes show how business activity such as mergers, acquisitions, layoffs and IPOs are funneling out into the local community.
The full QCEW data show that one particular business sector, biotechnology research and development, saw a nearly $34,000 rise in the average weekly paychecks — a 1,031% jump. The year-over-year change in quarterly wages in that sector was $476 million.
Excluding that outlier third quarter, Boulder County’s wages still grew by a rolling average of 6.3% over the four quarters ending in the second quarter of 2019, according to QCEW and Colorado Department of Labor and Employment data. That outpaces the national growth by 3 percentage points.
Two key factors playing into that growth for Boulder County are historically low jobless rates and an influx of higher-paying professional and technical services jobs, said Ryan Gedney, senior economist for Colorado’s labor department.
In 2019, Boulder County had an unemployment rate of 2.4%, which is lower than both Colorado and the United States, at 2.8% and 3.7%, respectively, according to Colorado Department of Labor and Employment and Local Area Unemployment Statistics data.
“Different companies are vying for workers,” he said. “That’s going to push up wage rates.”
A tech hub grows
Professional and technical services — think R&D and computer design — have been this region’s bread and butter for years. Boulder County has the third-highest concentration of professional and technical service employment among the nation’s metropolitan statistical areas, putting it higher than the Bay Area.
And the segment has been a job growth boon for Colorado recently, accounting for one-third of jobs added last year, Gedney said.
“It’s clear that many of our innovation businesses, the tech industry in particular are seeing some additional growth in Boulder, and those are higher-paying jobs and very desirable for any community,” said John Tayer, CEO of the Boulder Chamber.
“Along with that, we’re also seeing that the rising tide lifts all boats as we have businesses move to town or grow,” Tayer said.
On the flipside, the influx of people into a community that has long resisted growth, has driven housing prices upward and priced out longtime residents.
“Income inequality, wealth gaps are issues that are not unique to Boulder,” Tayer said. “We want to see our employees earn wages that are appropriate for the work that they do.”
But as Boulder’s reliance on technology employment grows, area business leaders say Boulder and Colorado are more insulated now than they were during the dot-com bust of the early 2000s or the energy collapse of the 1980s.
Colorado took longer to recover from the dot-com event than the Great Recession — by about one month — then ended up outperforming the nation in the recovery from the Great Recession, CU-Boulder economist Lewandowski said.
“What was our shortcoming in the early 2000s ended up being our comparative advantage during the 2010s,” he said.
Since that time, the state and Boulder Region have experienced economic growth in other industries such as natural foods, outdoor products, beverage manufacturing, as well as a longstanding contingent of federal research laboratories, said Clif Harald, of the Boulder Economic Council.
“It’s a really important part of how the whole region, especially Boulder, has evolved over the last quarter century,” he said.