At the end of last year when it seemed like a recession was nigh, Colorado’s economy showed signs of growth even as local business leaders were pessimistic. The technology sector appeared particularly troubled as the big tech companies shed jobs by the thousands.
But Denver may be more resilient than one might have expected, or at least it held its own in the tech world. In a new analysis, the Denver region ranked as the 10th best metro area in the Scoring Tech Talent 2023 report by commercial real estate service CBRE. The company has ranked the top 50 tech cities since 2012 to better understand local office markets.
The report looks at tech workers — not necessarily tech companies — and highlights cities that appeal to young and educated workers seeking jobs in technology. That’s been one of Denver’s strengths for years, thanks to the number of graduates with engineering or advanced degrees from local universities and the lower cost of living compared to tech hubs on the coasts.
“Denver’s numbers compared to the other markets in the top 10 is an interesting analysis,” Nicholas Weld, with CBRE’s Tech & Media Practice in Denver, said in an email. “While Denver’s average wage for tech talent is the 10th highest, the market is tied for third among the top 10 for its rent-to-wage ratio meaning salary often goes further in Denver compared to other leading markets.”
The area, however, used to rank a wee bit higher. In 2020, the Tech Talent report ranked Denver at No. 7, citing the tech job growth. CBRE said the annual rank is based on local employment and wage growth, plus graduation rates so as those fluctuate, so does the rank. The city was 12th in 2012.
Denver’s average annual wages for tech workers have grown 24.7% in five years to $110,140. While lower than the top-ranked Bay Area, which averaged $157,457, wages were higher than four others on the Top 10 list: Toronto, Austin, Vancouver and the Dallas-Fort Worth area.
But there’s lower rent in Denver than many other top metro tech areas. Apartment rents in Denver are averaging $1,799 a month, or 19.6% of a tech worker’s annual salary. That’s a 20.8% increase in costs over five years, when rent averaged $1,489 in Denver, according to the 2019 report. So wages have grown faster than rent, at least for tech workers who rent.
In New York, rent eats up 34.2% of that worker’s pay. That means there’s a little more fun money for employees who choose to live in Denver than places like Orlando, where rent costs 22.2% of pay, Nashville (20.6%) and Phoenix (20.2%).
“Strictly among the top 10, Denver has the sixth-highest tech wage, the fourth-strongest rate of wage growth and the sixth-strongest rate of tech workforce growth,” Weld said.
While 2022 was a year for big layoffs at major U.S. tech companies, those workers aren’t staying unemployed for long apparently. CBRE points to a Challenger, Gray & Christmas report that the tech companies account for 30% of the 700,000 layoffs globally by U.S. employers since 2022. But non-tech employers, which employ 59% of the nation’s tech talent, did not announce layoffs.
“Recent tech company layoffs have created opportunities for other industries to hire much-needed tech talent,” according to the Tech Talent report.
➔ Colorado Springs also made the CBRE cut, but as part of Tech Talent’s “Next 25” list. The city, with a five-year rate of tech employment growth at 20% landed the second-biggest smaller market. That puts it at number 52 on the list. Annual tech wages in the city averaged $102,215, a 9% growth over five years, with the average software developer wage at $123,023, the highest of the next 25.
>> View CBRE’s Scoring Tech Talent 2023
Related:
➔ Colorado has fifth best tech economy. Earlier this year, the Computing Technology Industry Association, which provides IT certifications and supports high tech job training, ranked Colorado as the state with the fifth best tech economy in the U.S. Tech’s economic impact was estimated at $52.6 billion, or 12.2% of Colorado’s economy thanks to 19,669 tech businesses, which includes 1,622 that opened last year — the fifth highest total in the country. >> CompTA report, data
Colorado’s June jobs report
The state’s unemployment rate didn’t change in June, staying the same as May’s 2.8%. The U.S. rate dropped one-tenth of a point from May to 3.6% in June.
Behind Colorado’s rate, there were 1,500 more unemployed individuals in June who offset 3,000 more employed individuals, according to the latest jobs report from the Colorado Department of Labor and Employment. The flat rate was due to rounding, said Ryan Gedney, the department’s senior economist.
The number of jobs created was more positive. Job creation by private employers picked up in the second quarter after seeing some declines in the first quarter. Private employers added 4,700 nonfarm payroll jobs in June.
“With preliminary June figures, Colorado has added 19,400 nonfarm payroll jobs in the second quarter of 2023. That is a vast improvement from the mere 600 jobs added in the first quarter,” he said.
But employment growth lags behind the nation’s rate. The state was 1.6 percentage points lower than the U.S. in April. That, said Gedney, may change as more benchmarking is done.
“Colorado typically does not have a slower growth rate than the U.S. and in June, it’s a little closer, just a percentage point,” he said. “I think some of that’s due to our payroll estimates … undercounting employment.”
Revisions and updates expected in the next month will shed more light into what those estimates really should be “and I do believe we’re going to see some substantial upward revisions,” he said. “The short version is that Colorado’s growth rate is not as bad as it looks.”
The June data:
- 91,600: Unemployed individuals, up 1,500 from May
- 3,157,500: Employed individuals, up 3,000
- 3,249,100: Labor force, up 4,500
- 68.7%: Labor force participation rate (just below the pre-pandemic 68.8% in February 2020)
- 2,909,900: Nonfarm payroll jobs, up 4,700
- Industries adding the most jobs: Leisure and hospitality, up 1,700; manufacturing, up 1,400; and professional and business services, up 1,300
- Industry with job losses: Trade, transportation and utilities, down 1,000
- Metro unemployment rates, which should be compared with the state’s not seasonally adjusted rate of 3.3% in June:
- Boulder, 3.1%
- Colorado Springs,3.5%
- Denver-Aurora-Lakewood, 3.3%
- Fort Collins, 3.0%
- Grand Junction, 3.7%
- Greeley, 3.5%
- Pueblo, 4.4%
➔ Working six more minutes for a bit more pay. On average, Colorado employees worked six minutes longer a week in June compared with last year, or 33.3 hours a week compared with 33.2. Average hourly earnings rose 3% to $35.27 from $34.23 a year ago. That’s $1.69 more than the U.S. average of $33.58.
>> More June job numbers for Colorado >> View
“Durable skills” vs. AI
An education is great but the most requested skill asked by employers are things called “durable skills,” which on surface may seem to be more like personality traits: creativity, critical thinking, self-understanding, to name a few.
But Tim Taylor, president of America Succeeds, believes they can be taught — and learned. His Denver organization advocates for better policies to improve public education systems to help every child for the future economy.
“The challenge isn’t really whether someone can learn them; it’s who’s getting the opportunity,” Taylor said in an email. “Students learn durable skills today through sports teams, extracurriculars, internships, travel experiences, their family and communities — rarely in the context of a traditional classroom — and so, educational opportunities around durable skills remain inequitable. Overcoming this gap will require a transformational approach, addressing policy barriers, scaling new and innovative practices, and shifting perceptions around how we prepare learners for future success.”
His company analyzed 80 million job openings and narrowed it down to a Top 10 list of durable skills, a term he said they coined. In Colorado, they found 1.5 million jobs where employers asked for these 10 qualities the most:
- Communication
- Creativity
- Critical thinking
- Fortitude
- Growth Mindset
- Leadership
- Metacognition (i.e.: self-understanding and personal management)
- Mindfulness
- Character
- Collaboration
These are concepts that can be taught throughout the day, unlike a set time for a math or reading class.
“You don’t think critically from 11 a.m. to 11:45 a.m. and then go to math,” he said. “Instead, imagine that math teacher approaching a lesson slightly differently. Asking students to solve problems in small groups, multiple ways, and then present their work to the class. Students are still learning the curriculum, but also practicing collaboration, critical thinking and communication along the way.”
Maybe he’s onto something? The workforce of the future will be competing (or already are?) with machines, computers and artificial intelligence, he pointed out.
“We expect demand for this skill set to only grow in the future,” he said. “As AI and technology continue to reshape jobs, it’s the human or durable skills that can’t be automated today that will make a difference in someone’s career journey.”
>> View report
Other working bits
➔ Rents are up $32 a month in Denver. That’s considered flat, according to the Apartment Association of Metro Denver. Average rents were $1,878 a month, or 2% higher than a year ago. The median rent in Denver was $1,802. More apartments are on the way, however. A total of 120,000 units are in the pipeline, which is equivalent to 30% of the current inventory, said the apartment organization. That could mean declining rents as more apartments open but that’s not 100% certain as “developers and investors are nervous about the political climate in Denver. With nine new laws (passed in 2023), providing rental housing could become a great deal more complicated and expensive,” the association said in a statement. >> View report
➔ $1,077 to rent a room in Denver. Roommate service SpareRoom.com looked at average rents in a variety of cities and ranked Denver as the fifth highest, at $1,077 a month for the second quarter, up 10.9% from a year ago. While it wasn’t the fastest-growing monthly rent rate — that would be Chicago, at 16.5% — roommates in Denver pay more than they would in Chicago ($1,058), Seattle ($989) and Austin, Texas ($959), according to the United Kingdom-based company, which first moved into the States in 2017. Longtime, crazy-high rent New York City took the top, at $1,625 to be a roommate.
➔ Share your 2-cents on digital equity. A pot of federal dollars to improve broadband access nationwide includes a portion of funds to help communities also get skills training and digital support. If you want to share what you need or want, take the 10-minute survey on digital equity that was put together by the state of Colorado. >> Take the survey: qrco.de/copublicsurvey
Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
- What’s Working: Job openings in Colorado decline as employers presumably find the staff they need
- What’s Working: Inflation in rural Colorado is likely higher than it is in the Denver area
- What’s Working: What happened since Colorado invested in Colorado Springs as a cybersecurity hub
- What’s Working: Connecting Colorado’s latest economic reports on inflation, housing and jobs
- What’s Working: Colorado’s summer jobs are disappearing
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.