Liddick: Colorado’s business drain
Quickly now: What unites the apparatchiks of mighty Denver, Queen City of the Plains, and tiny Silverton, one of Colorado’s pretty pockets of the super-rich?
Appreciation for their picturesque surroundings, yes. Conviction they live in the best place on Earth, probably. An all-costs obsession with “going green.”
And now we can add distaste for the nasty business of making money.
For those who follow these sorts of things, last Tuesday the Mountain Boy Sled Company announced it was pulling up stakes in Silverton and moving its operations to Crested Butte. This was the culmination of a two-year running spat with the authorities of the 500-person hamlet, who had essentially decided to regulate and harass the company out of town. Oh, and the much-patronized distillery MBSC owns and operates is leaving as well.
Why is this teapot tempest in a southwest Colorado mountain valley town worth noticing? Because it reflects larger realities. Consider Denver. When the sale of Qwest communications is complete, the corporate headquarters of the resulting telecommunications company will pack itself off to Monroe, Louisiana, following First Data and Midwest/Frontier on the road out of town. Colorado’s capital city will be left with exactly zero Fortune 500 companies. And it’s not because of the weather.
As they moved maintenance jobs out of state, an aviation consultant involved with the Republic/Midwest/Frontier merger told the Denver Business Journal why they had done so: “Airlines have to make money, and they’re going to move jobs to where they can make money. Colorado is just not a business friendly state, as far as that goes.” Businessmen are hard to fool: Despite the rhetoric from our political class, actions still speak louder than words.
Why be concerned? Because corporations provide many of the necessities of modern life. Goods. Employment. Tax revenues, and through them, infrastructure. Opportunities, and not only in the world of B-2-B sales and services. Moreover, large corporations like to be seen as good “corporate citizens,” so they tend to be openhanded in funding charities and the arts. When they leave, this revenue dries up.
Of course one can take the Ron Binz approach and simply make continued corporate largess a price for PUC approval to continue in business. But extortion hardly enhances the image of Colorado as a place in which one would want to locate.
Colorado-wide employment and economic statistics reflect this gritty reality. According to the CPS “household survey” of employment, jobs in Colorado grew from just over 2.3 million in 2000 to a high of 2.6 million in early 2008. Since then we’ve lost 195,000 jobs. The workforce has added 300,000 people in the same decade. And there’s worse.
Over the past 10 years, the types of jobs done in Colorado have changed dramatically as well. Since 2000, there has been a decline of more than 20,000 jobs in computer and electronics manufacturing; telecommunications has lost around 15,000, publishing and construction, more than 10,000 each and metal manufacturing, over 5,000. Data processing and service jobs have declined over 40 percent. What has grown?
Educational services. Almost 40,000 Coloradans have found jobs in this field, an increase of more than 23 percent over the past 10 years. One can only wish that students’ test scores had increased commensurately.
Health care services, up by almost 30,000. Hospital employment, over 20,000. Food services and restaurants, up about 15,000. Note that these are not jobs in which goods are created for sale in a national or world market. In the first and second instances at the least, wealth has to be created first so that they may be paid for. Globally speaking, they are not self-financing.
So not only has Colorado job creation been anemic, there has been an accelerating trend away from higher-skilled, high-tech and manufacturing jobs and toward lower-skilled – and lower-paid – positions in the “service” economy. Our economic and political leaders have evidently decided that we will fund the future by taking in each others’ laundry.
There are predictable results from these trends, and indeed, we’re beginning to see them. Colorado’s per-capita income dropped from seventh among states in 2000, is now 16th. Our median household income fell 6.8 percent over the decade.
The rot could continue, if we persist in following what might be termed the “Silverton Model” of corporate relations: Businessmen are greedy so profit is corrupt; growth must be discouraged, because it might get out of hand. While one has to tolerate them, businesses should know their place and stay out of the way of their betters, who regulate and tax them. Frontier learned their lesson. So did First Data. Qwest/CenturyLink. Even the Mountain Boy Sled Company. And they acted accordingly.
One wonders who’s next?
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