A Boom Without Prosperity, by Patrick Boyle, vice president of Colorado Association of Commerce and Industry.DENVER--(BUSINESS WIRE)--April 11, 1996--Earlier this month the Colorado Public Expenditure Council released one of its periodic reports on Colorado fiscal issues. Buried among the statistics lay a shocking datum The singular form of data; for example, one datum. It is rarely used, and data, its plural form, is commonly used for both singular and plural. : Coloradoan's personal income per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. declined in 1994 against inflation. That's right For The Lyle Lovett song, see . This article contains information about a scheduled or expected . It may contain information of a speculative nature and the content could change dramatically as the single release approaches and more information becomes available. , declined. In fact, personal income growth per capita was worse from 1992-1994 than from 1985-1987, the Great Recession of the 1980s. This setback ought to worry those who have been agonizing about traffic, pollution and all of the other annoyances attendant upon our current boom. Did I say boom? Well, we've been told that we're in a boom. Unemployment is declining. Sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. revenues are growing steadily. Housing starts, and now commercial building are up, and so forth. Indeed, every economic index seems to be favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. except perhaps the most important -- how much money we have in our pockets. We have a boom but without prosperity. (No wonder everyone's grousing about the traffic.) What could account for this anomaly Abnormality or deviation. Pronounced "uh-nom-uh-lee," it is a favorite word among computer people when complex systems produce output that is inexplicable. See software conflict and anomaly detection. ? More important, what are we doing about it? Answering the first question requires some analysis. The recession of the '80s was characterized by loss of high-wage jobs -- in mining, manufacturing and construction -- and by emigration emigration: see immigration; migration. from Colorado. Those who lost their jobs left the state. What has characterized the recovery of the '90s is renewal of net immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. : the population has grown at a robust rate. At the same time, unemployment has fallen about 4 percent because 150,000 jobs were created from 1992-1994. One would think this is a good sign. Falling unemployment rates usually mean higher wages as employers compete for labor. But, it hasn't happened, leading one to ask what kind of jobs we have created during the recovery of the '90s. Well, the construction industry has rebounded as rapidly as it declined a decade ago, with more than 20,000 jobs added between 1992 and 1994. But construction is finite. Once you've built what you can afford with the money you have or have borrowed, that's it. Construction is not self-sustaining. Mining and manufacturing, which are self-sustaining, haven't recovered the jobs lost in the '80s. Mining continues its long, slow decline, which has resulted in more than 25,000 jobs lost in 15 years, and there is no immediate prospect of a turnaround. Manufacturing muddles along but doesn't grow. We have replaced the jobs lost when defense industries contracted and major Colorado employers downsized, but no more. That is disturbing for two reasons. Mining and manufacturing are basic, wealth-creating industries. Moreover, they usually pay substantially higher-than- average wages. Net job growth in the private sector has occurred primarily in two areas: services and retail trade, and these sectors generate primarily low-wage jobs. In addition, they rarely create wealth; mostly, they just move it around. They can't be expected to provide the foundation of a sound economy. It is clear Colorado urgently needs to create basic, high-wage jobs or risk falling into a recession again. Probably the best place to look for such jobs is in manufacturing. Colorado historically has had a smaller manufacturing base than most states, yet it need not be so. It is more the result of a policy of neglect than economic or geographic fate. Colorado manufacturers cite two main obstacles to growing and therefore creating those high-wage jobs we need. First, the state's notoriously high taxation of capital investment is an impediment A disability or obstruction that prevents an individual from entering into a contract. Infancy, for example, is an impediment in making certain contracts. Impediments to marriage include such factors as consanguinity between the parties or an earlier marriage that is still valid. to establishing or expanding in Colorado. Personal property taxes and use taxes on equipment matter a lot to manufacturers. They are hard costs. Second, the lack of a critical mass of manufacturing activity makes it difficult to find certain skilled craftsmen. Ironically, while Coloradoans fill new, low-wage jobs, manufacturers import some skilled labor from neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. states. Doing something about the first obstacle might reduce the second. Manufacturers need some incentive to invest in Colorado. It's time It's Time was a successful political campaign run by the Australian Labor Party (ALP) under Gough Whitlam at the 1972 election in Australia. Campaigning on the perceived need for change after 23 years of conservative (Liberal Party of Australia) government, Labor put forward a to craft a strategy for growing these high-wage jobs. Absent such a strategy, we had better enjoy the boom. The recession will be horrible. CONTACT: Gerry Freeman, 303/232-3870 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion