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Report: Snapshot of local economy

Last week, Region 9 Economic Development District of Southern Colorado released the Comprehensive Economic Development Strategy (CEDS) report for the Four Corners area and Archuleta County, providing an interesting look at how Pagosa Country compares with surrounding counties and the rest of the state.

According to Region 9, the report was generated, “(T)o create a plan for retaining and creating better paying jobs, fostering stable and more diversified economies, as well as maintaining and improving the quality of life in Southwest Colorado and Archuleta County.”

The full report can be found at www.scan.org/regional_data.html by clicking on the “Archuleta County 2011” link near the bottom of the page.

As a snapshot of the county’s economic status, the CEDS report provides some provocative numbers that could determine how local officials view the future of economic development in the area.

For instance, the CEDS document reported a total of almost $365 million in Total Personal Income for county residents. Of that total, 21 percent was due to estimated payments to retirees (from pensions, social security and investment dividends), while just 44 percent was due to employment earnings.

The ratio of dividend income to employment income has significantly changed since 1970, with the former consistently increasing over the past 40 years, and the latter shrinking. In 1970, employment income was about 75 percent of TPI in the county, with dividend income accounting for less than 10 percent of overall TPI. In 2009, dividend income had grown to become 34 percent of the county’s TPI — just 10 percentage points less than total employment earnings.

Those numbers suggest a decades-long national trend in income distribution. Two weeks ago, the Congressional Budget Office (CBO) reported that, from 1979 to 2007, average income for the top 1 percent grew by 275 percent. During the same time period, the rest of the top 20 percent saw their average income grow by 65 percent.

According to the Internal Revenue Service, most of that income for the top 1 percent was accumulated through investments and not actual wages. From 1992 through 2005, net income from capital gains increased from about 38 percent to 58 percent of that group’s TPI, while wage income (as a percentage of aggregate TPI) fell from over 25 percent to only 9 percent during the same time period. Other income (i.e. taxable interest, dividends and net income from partnerships or S-corporations) also increased for that group.

In the meantime, the CBO also reported that those in the middle — 60 percent of Americans — had average income growth of just under 40 percent while the 20 percent with the lowest income saw just 18 percent income growth between 1979 and 2007.

That income situation has created some difficult choices for low-income earners in Archuleta County, with a 2009 $29,344 per capita personal income (PCPI) ranking 55th in the state and 70 percent of the state average ($41,895), 74 percent of the national average ($39,635).

Of the five counties (including Dolores, La Plata, Montezuma and San Juan counties) represented by Region 9, Archuleta County’s PCPI was the lowest.

For a single person renting a one-bedroom unit in Archuleta County, Region 9 estimates that person would need to make $10.56 an hour for a livable wage (i.e. to provide themselves shelter, food, transportation and cover other basic necessities) and would need to work 1.5 minimum wage jobs ($7.24 an hour) to meet that livable wage. Thus, a family of four renting a three-bedroom unit would need at least $27.66 an hour (or four jobs at a minimum wage) in order to survive.

Looking at historical CEDS data adds some light to the burdens of survival for low income earners in the county.

While it should not come as a surprise to most long-time residents, the CEDS report showed that, over the past 40 years, the economy in Archuleta County has moved from a largely agricultural and manufacturing (i.e. timber) based economy to a service based economy. In 1970, 30 percent of the county’s total work income was generated by the timber industry.

The effect of that industry’s decline is reflected in Bureau of Labor Statistics (BLS) data showing spikes in unemployment during the late 1970s — a period that continues to hold the record for unemployment numbers in Archuleta County.

In May 1978, unemployment reached 30.9 percent, the highest its ever been. From December 1977 through June 1978 (when, with the exception of one month, unemployment remained above 20 percent), average unemployment in the county reached 24.45 percent.

In the last five years, manufacturing has shown a resurgence in the area due to companies like Growing Spaces and Parelli Natural Horsemanship setting up shop in the county. Accounting for a little over 1 percent of sales tax revenues in 2005, manufacturing has grown to provide over 5 percent of sales tax revenues for the county in 2011. In fact, the Region 9 CEDS stated, “When we compare job growth from 2001 to 2009, we see that the most growth was in manufacturing, mining and utilities and service sectors.”

In fact, according to the report, service sector jobs accounted for 41 percent of jobs in the county and 39 percent of employment income. In that sector, the retail trade sector provided 15 percent of the jobs and 17 percent of employment income. Overall, proprietors (owners) accounted for 23 percent of total employment in the service sector with the other 77 percent accounted for by wage and salary workers.

It should be noted that a majority of service jobs in the county pay minimum wage (or slightly higher), with few paying wages that meet the standards Region 9 suggested provides a livable wage.

Thus, it makes sense that, in 1970 and 1980, more people were coming from outside the county to work than were seeking wages outside the county (when the timber industry was paying relatively high wages compared to service industry jobs). In 1990 (when the manufacturing base dropped in the county), that situation reversed — a trend that continued through 2009, showing more residents working jobs outside the county but few (if any) coming into the county to work.

Two more pieces of information in the CEDS report cast a dim light on the plight of low income earners in Archuleta County.

First of all, the report estimated that over 24 percent of county residents are uninsured and have no access to healthcare — well above the national 16.7 percent rate reported last year.

Secondly, during the fourth quarter of 2010, Archuleta County was ranked third in the state with a foreclosure rate of 68 percent of occupied housing units. However, the CEDS report noted that, “(C)ounties with small populations are prone to very volatile foreclosure rates as a small rise or fall in the total number of foreclosures can significantly change the foreclosure rate in terms of a percentage. Foreclosures in rural resort counties also often reflect 2nd homes or time shares.”

Not all news was negative in the CEDS report, especially in two areas that have recently been the focus of local news — and elections.

Regarding schools, the CEDS report said, “Of note is the fact that Pagosa High School scored the highest of all high schools in Region 9 in the Academic Achievement indicator, with the highest percentages scoring Proficient and Advanced in the CSAP subjects of Reading, Math and Writing.”

The same report showed 9th-grade CSAP scores 4 percent higher than state averages on reading and math, 6 percent higher on writing.

Finally, as far as roads, the CEDS document reported several highway-improvement projects slated through 2014 — a $2.77 million intersection improvement project at U.S. Highway 160 and Eighth Street (set to begin next year) and a $2.13 million intersection improvement project at Vista Boulevard/Meadows Drive and U.S. 160 (slated for completion in 2014).

Overall, the CEDS report is a mixed bag of data, some positive news mixed in with quite a bit of information that could be construed as negative. It will be interesting to see how various local officials and the Pagosa Springs Community Development Corporation views that information, interprets it and decides how to proceed with whatever conclusions are reached.

jim@pagosasun.com

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