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Colorado last in job growth

Derailed tech economy, fires’ effect on tourism send ranking plummeting.
Colorado ranks last in the nation in job growth as the collapsing telecommunications, high-technology and tourism industries drag the state into its deepest employment slump since oil firms bailed 15 years ago.

By Mark P. Couch
Denver Post Business Writer

The latest figures from the U.S. Bureau of Labor Statistics contradict the state’s top political and business leaders who repeatedly say Colorado has escaped from the boom-bust cycle that has shaped the state’s fortunes for decades.

It apparently hasn’t.

After the technology boom of the 1990s, the bust is back – in a big way. For the 12 months ending July 31, Colorado lost more of its job base than any other state.

The decline is causing some residents to consider leaving the state and forcing top economic-development leaders to re-evaluate their job-recruitment programs.

Kim Casper, who has lived in Denver for four years, said she is considering a move out of state. On Thursday, she was at the Mayor’s Office of Workforce Development browsing the Internet for jobs in Philadelphia.

Since losing her job in January, the 40-year-old artist said, she has taken contract work in marketing and event-planning and as a substitute teacher.

"But it’s so sporadic, I can’t depend on it for my income," Casper said.

Since she moved here from New York, she said, three of the companies she worked for have gone out of business – two of them while she was an employee.

"I just decided I’m going to have to look in other areas," she said.

For Casper, the downward economic cycle is gripping Colorado tighter than the rest of the country, and if she moves, she would be going against the flow.

The number of people moving to Colorado is expected to grow by 35,000 this year, according to statistics compiled by researchers at the business school of the University of Colorado at Boulder.

"It’s true that we’ve neither been able to suspend the business cycle nor the boom-and-bust cycle of the Rocky Mountain West," said Earl Fry, professor of political science at Brigham Young University in Provo, Utah.

"Technology is no panacea, but we’re probably better off having a significant portion of our economy linked to high technology than not having it," Fry said.

But right now, times are tough.

Colorado had 49,800 fewer jobs in July 2002 than it did a year earlier. That’s a 2.2 percent decrease, according to the Bureau of Labor Statistics, and the sharpest percentage drop in the country.

Colorado’s mountain-state neighbors Wyoming and Nevada ranked at the top of the chart with 2.9 percent and 1.3 percent increases, respectively.

In Colorado, most of the decline in jobs is related to the state’s push into software, high-speed communications and other technology businesses – areas with robust growth in the 1990s and nearly nonexistent opportunities during the past two years.

Politicians have touted technology with the fervor of a new gold rush. The sector has been touted as the key to a well-balanced Colorado economy.

During Gov. Bill Owens’ 2002 State of the State address, he praised the technology sector as a steadying influence on the state economy.

"In spite of a challenging economic environment, let us take confidence and comfort in the fact that Colorado’s evolution to a major international technology hub is responsible for a greatly diversified economy," Owens said.

Dan Hopkins, spokesman for Owens, said the July job-loss figure is a "snapshot" of one month and doesn’t reflect the long-term success Colorado has enjoyed.

"From 1998 to the present, Colorado still ranks eighth in the nation," Hopkins said. "We think Colorado is well-positioned in the national economy and well-positioned to take advantage when the economy bounces back."

More than half a year after Owens’ speech, technology’s continuing troubles are pounding Colorado.

Some of the state’s largest employers, such as Qwest, Sun Microsystems and Lucent, have laid off workers. Other start-up technology companies, such as Rhythms NetConnections, have filed bankruptcy, casting thousands into the job-hunting ranks.

Consolidation among big firms also could add to the ranks of the unemployed. Hundreds of Colorado workers at AT&T Broadband are likely to lose jobs when the company completes its merger with Comcast by the end of the year.

The decline during the past 18 months has been steep.

So far this year, Colorado has lost so many jobs it ranks 48th in percentage change in the number of jobs. By contrast, during Colorado’s glory days in 2000, the state added so many jobs that it ranked third in the country.

"We’ve gone from third best to third worst," said Tom Dunn, the Colorado legislature’s chief economist.

Dunn said the drought and wildfires have contributed to this year’s woes, scaring away tourists.

Eugene Dilbeck, president of the Denver Metro Convention & Visitors Bureau, estimated that Colorado will lose $700 million in tourist dollars this year.

The telecommunications and technology woes are hitting job base of Colorado even harder.

"In telecom, we have high exposure, and that industry has yet to bounce back," Dunn said. "And in high technology, we have one of the highest concentrations of workers in the nation. When that industry went south, Colorado was hit hardest."

The first signs of decline appeared in late 2000.

"The day after Thanksgiving 2000 is when the wheels fell off," said Don Dunshee, executive director of the Broomfield Economic Development Council.

"We had four or five companies that were looking for 200,000 to 400,000 square feet of office space (in the metro area)," Dunshee said. "Those companies started to peer over the horizon and saw the holes in the road. That’s when they quit returning calls. It was just like they cut the phone lines."

The current slump fostered a fledgling mutiny among the Denver area’s top economic-development officials who blame the Denver Metro Chamber of Commerce for failing to corral jobs with an aggressive economic-development program.

Under the chamber’s direction, the chief job-recruitment and retention agency, the Metro Denver Network, has withered into a shadow of its former self.

Last month, leaders at top local economic development groups threatened to pull out and start their own version of the network, which markets the entire Denver area to companies that are considering expansions or relocations.

Some leaders tie the decline in job growth directly to the fading funding at the agency.

"We rank 50th out of 50 in new-job creation and 50th out of 50 in marketing expenditures," said Bill Becker, president of Adams County Economic Development. "That’s not a coincidence."

Earlier this week, the chamber committed to providing more funding to the group while sharpening its focus by targeting other high-growth industries.

"We’ve mended fences in a major way," Becker said, "but the proof is in the pudding."

http://www.denverpost.com/Stories/0,1413,36%257E33%257E855870%257E,00.html

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