For the Colorado economy, the decade of the ’00s lived up to its name.
Only one 10-year stretch had weaker job growth than the one just ended — the depressed 1930s, when more than 20,000 jobs disappeared — a Denver Post survey of the past 12 decades found.
Even the 1980s, laden by an oil- and-gas bust that collapsed commercial real estate prices here, were much more robust.
But as bad as it’s been, the bright side appears to be there’s almost nowhere to go but up.
“The ’00s started with a very heated economy and ended in a severe recession,” said Bill Kendall, president of the Center for Business & Economic Forecasting in Denver. “With the ’10s, we are starting at the bottom and maybe will end in a better situation.”
Though nonfarm jobs increased a meager 2.6 percent this past decade — averaging just 5,750 jobs yearly from December 1999 through November 2009 — the state should see job growth closer to 25 percent in the ’10s, Kendall forecasts.
During three years — 2002, 2003 and 2009 — the state shed jobs.
How bad was the past decade? Put in perspective, the state averaged 67,000 new jobs a year in the 1990s and 27,000 jobs yearly in the troubled 1980s.
“It seems strange that the state added more than 800,000 people and fewer than 80,000 jobs,” Kendall said, comparing population growth with job growth over the past decade. “The unemployment rate should have risen a lot more than it did, but a lot of people dropped out of the labor force.”
Some, such as Littleton resident Tony Hughes, are fed up and on the verge of giving up their search for work.
A mechanical engineer, Hughes came to Colorado in 1987 to work for defense contractor Martin Marietta. He was laid off in 1993 but sprang back quickly.
“I had another job before I left,” he said.
This time was different. The 67- year-old wants to keep working to make up for retirement savings that “went down the toilet” this decade.
“In the time I have lived in Colorado, it is the worst I have seen it,” said Hughes, who especially worries for his grandchildren preparing to finish college.
Slipping state performance
Colorado’s economic performance relative to other states’ slipped in the past decade, despite having avoided the devastating run-up and collapse in home prices that states such as Arizona and Nevada saw, Kendall’s research shows.
From 1939 to 2000, Colorado ranked sixth among states in the number of jobs created. Things looked healthy, optimistic, promising.
In the ’00s, Kendall notes, it plummeted to 20th.
The problem looms larger when population is factored in. As the decade closed, Colorado’s population growth rate was almost double that of the country’s.
The state added about 870,000 residents in the past 10 years, according to estimates.
To support that growth, Colorado’s economy needed to consistently spin off 40,000 to 50,000 jobs a year — or 30,000 jobs at a minimum, estimates Richard Wobbekind, an economist with the University of Colorado at Boulder.
That happened in the 1990s, when robust job gains were driven by the technology and telecom boom.
When that went bust, Colorado suffered a more severe downturn than other states, suggests Michael Orlando, a consultant at Economic Advisors Inc. in Denver.
Things teetered, and gains in construction, finance and real estate jobs helped picked up some of the slack, he said.
Then came the housing downturn and credit crunch, and everything derailed.
“I think our relatively poor job performance in the 2000s says more about the recession at the beginning of the decade than it says about the recession we’re in now,” Orlando said.
The credit crunch of the past two years hit Colorado hard, starving entrepreneurs and small businesses of the capital they needed to create jobs, Orlando and Kendall agreed.
“We are coming through a decade where we didn’t have major job generators,” Wobbekind said.
And personal incomes weren’t the only thing to take a hit. The decade made a major dent in household wealth.
Nationally, the net worth of all U.S. households peaked at $64.5 trillion in 2007, according to the Federal Reserve.
In the third quarter, it stood at $53.4 trillion.
U.S. markets have declined 40 percent or more on only four occasions since 1900, economist A. Gary Shilling notes. Two of those rare, once- in-a-generation declines came in the past nine years.
Even with dividends factored in, the S&P 500 will end the decade with a deeper loss than it suffered in the depression-plagued 1930s.
And by some measures, U.S. stock markets have turned in their worst decade among any on record in the past 200 years.
Working from bottom up
While many once-promising Colorado companies that were around in 2000 are long gone, the survivors are trading at a fraction of their value.
Level 3 Communications, for example, traded at $1.53 a share at the close Thursday. It topped $100 a share in 1999.
Investors valued Qwest Communications and U S West at about $80 billion when they agreed to merge in mid-2000. On Thursday, you could theoretically buy Qwest’s market value for $7.3 billion.
Time will tell if the poor performance of the ’00s will self-correct like the 1980s, or if it is merely ushering in a longer stretch of pain.
Colorado’s economy underperformed from the 1910s through the 1930s, in part because of its reliance on precious metals and agriculture, according to Stephen Leonard, a professor at Metropolitan State College of Denver.
Though Colorado’s economy is more diversified, has more internal momentum and contains stronger safety nets for the unemployed than a century ago, a sustained stretch of poor performance could prove devastating, just as it did back then, he said.
“My theory is that we are going to begin a serious ratcheting down in the United States, and we have to find a way to manage it rationally,” he said. “We don’t have the margin of error that we had 40 or 50 years ago.”
Aldo Svaldi: 303-954-1410 or firstname.lastname@example.org