Denver did better than most metro areas in adding jobs and growing its economy coming out of the recession, but it struggled to translate those gains into a broader prosperity, according to a report by the nonprofit Brookings Metro Monitor.
“The economy of the Denver metro area outperformed most of its peers and the United States from 2010 to 2015,” said Chad Shearer, lead author of the .
Brookings Metro Monitor examined three indicators each in three broad categories — growth, prosperity and inclusion — from 2010 to 2015. Denver was one of only 11 metros out of the 100 studied that improved in all nine of the measures.
Denver did best on the three measures of growth, a category where it ranked 10th. Job growth, up 16.9 percent over the five years, was the seventh-largest increase in the country and outpaced the U.S. metro average of 10 percent.
The metro economy grew 17.2 percent, which ranked 11th overall. Startups and young firms accounted for 14.5 percent of the jobs, the 16th-highest share and a confirmation that entrepreneurs were important contributors to the local economy.
But many of the jobs added in Denver and other metro areas were in lower-paying and more labor-intensive service industries, which did little to boost the overall standard of living.
“A large share of job growth came from less productive industry sectors like healthcare, hospitality and retail,” said Shearer.
Restaurant employment, already a big category, was up 25.3 percent in Denver versus an 18.3 percent gain nationally. Commercial construction job growth ran at 40.4 percent over the five years, compared to the 14.8 percent gain measured nationally. Employment at senior care facilities in metro Denver shot up 38.2 percent, compared to a 19.1 percent gain nationally.
Other niches tied to health care, such as outpatient care centers and therapist offices, rose by even wider margins, reflecting the region’s high concentration of baby boomers.
Denver is improving on its prosperity ranking — and now ranks 36th overall — but is held back by weak productivity gains. Productivity, or the use of technology or training to boost what a worker can theoretically produce, allows employers to pass on higher wages, which in turn boosts living standards.
Denver’s productivity gain was a meager 0.2 percent, which ranked 42nd. Gains would have been negative, absent the strong showing petroleum firms made in getting more oil and gas out of the ground with fewer workers.
Weak productivity can drag down wage increases. Denver’s average annual wages rose 4.8 percent over the period studied, which ranked 38th among major U.S. metro areas. The gain in the standard of living was 6.4 percent, which ranked 33rd.
The third category examined in the index was inclusion, or how widely or narrowly gains in growth and prosperity were spread across a metro area’s population. Denver ranked 18th for inclusion, based on a 16th-place ranking for the share of the population employed, a 32nd-place ranking for its median wage, and a 26th-place ranking for relative poverty.
On a brighter note, Denver did sixth best in improving the share of the population that was employed, Shearer said. The strongest gains in both the employment rate and median wages came among minority and high school-educated workers.
“The Denver metro area’s trends in economic inclusion indicate that economic growth and increasing prosperity are benefiting a broad swath of the region’s residents,” said Shearer.
