by Dave Bamberger
Over the past 30 years I have been involved with local economic development efforts both as a volunteer and as a consultant. During that time I had a chance to make many observations about how the process works. I have concluded that the two factors that are most important are: (1) creating primary jobs and (2) building a high quality living and business environment. Here are my thoughts.
A healthy local economy depends on primary jobs. Primary jobs bring dollars into Colorado Springs from outside the local economy. When those dollars are spent in Colorado Springs, secondary jobs are created. Primary industries in Colorado Springs include the military, visitor industry, aerospace, defense, manufacturing, higher education, national nonprofits, Olympic sports, financial services, information technology, telecommunications, call centers, and others.
Secondary jobs depend on primary jobs. Each primary job supports a little more than one secondary job in Colorado Springs. Take primary jobs away and the local economy slows, secondary jobs are lost and unemployment rises even further. That is what happened in the mid 1970s, the late 1980s, early 2000s and is happening today.
The local economy must create new primary jobs every year just to keep up with a growing labor force. Colorado Springs’s labor force grows every year, even if no new people move to the city. The number of young people entering the workforce is greater than the number of older workers retiring each year. Both primary and secondary jobs must be created each year to meet the needs of a growing workforce, or these new job seekers will have to move to another city to find work.
Creating new primary jobs must be a continuous effort. It’s a fact of modern business. Companies come and go. The local economy must create new primary jobs every year just to keep up with existing primary industry closing or moving jobs out of town. When a company closes or moves out of town, these primary jobs must be replaced, or the city’s economy will rapidly decline.
Creating primary jobs makes for a stronger local tax base. Creating new primary jobs every year means more in property and sales taxes for the city, the county, school districts and other local governments such as the library. Let primary job creation slip and the tax base will decline.
New primary jobs provide opportunities for local workers to move up to higher paying jobs. Most of the primary jobs created in Colorado Springs over the past three decades have paid higher than average wages. Many local workers have taken advantage of these higher paying jobs and have moved up the career ladder. Local income has increased as a result.
Primary job creation is not the cause of population growth. A little more than half of Colorado Springs’s recent population growth is due to natural increase, the difference between births and deaths. Certainly, some job related net in-migration does occur over the long run. However, many people do move to Colorado Springs to be near family and friends. Retirement is also a significant driver of migration to Colorado Springs.
Primary job creation produces a high return on investment to the citizens of Colorado Springs. Growth of primary jobs increases incomes and that means a stronger tax base. A strong local tax base combined with the voter support to use it generates the funding to build schools, provide quality education programs, maintain and improve roads, build parks, fund recreation programs and maintain a high level of public safety.
In the long run the most effective way to create new primary jobs is to build a quality living and business environment. Attracting new primary industry and providing existing primary businesses the opportunity for expansion is much more effective in a community with high quality schools, roads, open space, business climate, recreation opportunities, workforce, public safety and a strong tax base. These are the key factors that provide a foundation for the local economy to continue to renew itself and to thrive.