Wage growth in Colorado has outpaced the US, but inflation creates imbalances

Denver (KDVR) — Colorado businesses are recovering from the depths of the pandemic, but inflation is eroding wage gains.

Economic indicators are looking for a Centennial state, according to a report from the University of Colorado Boulder Leeds Business School published in collaboration with the Colorado Secretary of State. The country’s GDP is rising again, unemployment rates are falling and small businesses are hiring at a faster pace.

However, the specter of national inflation hangs over the bright spots. Inflation outweighs wage growth even though Colorado wages outstrip the US

“I think it’s really important that state legislators and every elected official do everything they can to support the people of Colorado,” said Colorado Secretary of State Gina Griswold. “You know, the economy is bullish right now. Colorados averaged $33.28 an hour in December, which is an 8.2% increase in two years. But there are a number of cost increases, including housing and childcare.”

This puts Colorado ahead of national wage estimates by $2 an hour. The median wage in the United States was $31.31 an hour in December 2021, according to data from the US Bureau of Labor Statistics.

However, the issue of cost of living is not so much about wages as it is about purchasing power – that is, how much a dollar buys.

Workers actually have less purchasing power now than they did before, according to Tyler Goodspeed, a former economic adviser to the Trump White House and now a fellow at Stanford University’s Hoover Institution.

“The interesting thing in 2021 is that we saw significant nominal wage growth nationwide, but that nominal wage growth was not enough to keep up with overall inflation,” Goodspeed said. “So in terms of real inflation rates, national workers’ compensation actually fell by just under 3% last year.”

Goodspeed echoed Griswold’s concern about home prices. Early in the pandemic, supply chains restricted hard-to-secure items like microchips. Later, the relics spread to utilities and grocery stores. In 2022, home prices are expected to inflate more than other spending categories.

.

Leave a Reply

Your email address will not be published.