The combined personal income of all Coloradans grew 1.4 percent in the second quarter of 2007 from the first quarter, slightly outpacing the national average of 1.2 percent, according to a report released Thursday by the U.S. Bureau of Economic Analysis.
High-paying jobs, particularly in the technology, aerospace and mining industries, probably contributed to that growth, said Gary Horvath, an economist and managing director of the business-research division in the Leeds School of Business at the University of Colorado at Boulder.
“Colorado has a higher percentage of high-tech jobs than most other states,” Horvath said. “High-tech jobs tend to be higher-paying jobs.”
Providers of professional business services, such as engineers, lawyers and scientists, are also strong in Colorado, he said.
Personal income is defined as income from all sources, including wages, interest and dividends, rental properties and government support.
Wade Buchanan, president of the Bell Policy Center, a nonprofit, nonpartisan think tank in Denver, said personal- income growth doesn’t necessarily mean all workers are seeing extra income from one quarter to the next.
“It tells you nothing about how those increases are distributed,” Buchanan said.
“What’s going on in family budgets is the real question,” he said. “When you look at it that way, you have to weigh the increase in personal income in the expenses. We need to weigh it against what’s happening in the housing market.”
Buchanan said much of the economic growth was experienced by high-income earners.
“That’s not necessarily a bad thing,” he said, but it doesn’t mean opportunities have grown for those in the middle or lower classes, he said.
Colorado’s personal income grew 6.47 percent from the second quarter of 2006 to the second quarter of 2007. Meanwhile, inflation in the Denver metro region grew at a rate of 2.5 percent in the first half of 2007 compared with the same period of 2006.
BEA figures showed 70 percent of personal-income gains in the second quarter came from workers’ wages and benefits.
Colorado’s 1.4 percent second-quarter growth put it at 14th in state rankings.
Still, it was slower than the 2 percent growth the state experienced in personal income in the first quarter of 2007.
Utah was No. 1, with 2 percent growth; New York ranked 50th, with a loss of personal income of 0.1 percent. Meanwhile, 10 percent of Colorado’s growth came from the mining industry, which contributed to the gains more than any other sector.
“Average wages in mining are close to twice the wages overall,” Horvath said.
Miners are the highest-paid industrial workers in Colorado, with average annual wages of $93,600, according to the Colorado Mining Association.
Income from housing-related industries, such as homebuilding, finance and insurance, and real estate and rental leasing declined in Colorado.
Horvath said it was not surprising that the state’s personal-income growth was ahead of the nation’s.
“Our employment growth is greater than the U.S., and our wages are typically growing at a higher rate than the U.S.,” he said.
Staff writer Karen Rouse can be reached at 303-954-1684 or krouse@denverpost.com.
1.4% Personal-income growth in Colorado for the second quarter, 14th in the nation
