Mayor Bach sets aggressive jobs goal, but is it possible?

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Mayor Steve Bach set an ambitious goal of creating 18,000 jobs in three years.

Mayor Steve Bach has set an ambitious goal for himself and the Greater Colorado Springs Chamber and EDC — to create 18,000 new jobs during the next three years.

During his Aug. 9 State of the City address, Bach said he wants to create 6,000 new civilian jobs annually starting in 2013.

To put the number in perspective, Colorado Springs added 270 new jobs last year and is on track for 627 this year. In the three years before that, the city lost more than 14,000 jobs.

Bach said the goal is to replace jobs lost during the recession. He’s hoping in three years to lower the area’s unemployment rate from its current 9.8 percent to 5 percent. The state rate is 8.2 percent and Colorado Springs ranks No. 2 in metro areas behind Pueblo’s 11.2 percent.

No matter how you slice it, it’s a difficult goal.

“It’s certainly very, very optimistic,” said Fred Crowley, professor of economics at the University of Colorado at Colorado Springs. “Most optimistic.”

Walt Elish, president of the Northern Colorado Economic Development Corp. in Fort Collins, was even more direct.

“It’s aggressive,” said Walt Elish. “Wow. Given the economy, it’s a bold statement. And it’s going to be hard to achieve. Maybe things are different in the Springs.”

Elish’s organization creates an average of about 700 jobs a year, and he said last year it slowed to around 400.

Crowley doubts the goal is high enough in the short term to reach 5 percent unemployment.

“That might be enough to replace the lost jobs,” he said. “But it isn’t enough to create jobs for the people who are moving into the city every year. We’ll need more jobs for them as well if we’re going to move the needle on unemployment.”

Chamber/EDC President and CEO Joe Raso said he appreciates the mayor’s vision, but economic development isn’t really tracked annually.

“I look at economic development over a period of time,” he said. “And on a regional basis. No market grows consistently on an annual basis — it’s grown according to both internal and external factors.”

The case for 18,000

Moving the needle is going to be a challenge. Colorado lost 6,900 jobs from May to June this year, but had a net gain from June 2011 to June 2012 of 33,600 jobs, according to the Colorado Department of Labor and Employment.

“And he wants to add 6,000 a year for three years,” Crowley said. “The entire state is struggling to do that.”

But Bach didn’t pull the numbers out of a hat.

He’s relying on analysis from Summit Economics, which provided a report at the city’s request. Summit’s report said the addition of 6,000 jobs is roughly a 2 percent annual increase and will provide jobs for the 3,750 unemployed residents, 1,250 discouraged workers and 1,000 new entrants to the labor force each year.

Tom Binnings, a partner at Summit Economics, said the group wasn’t asked to create a plan to achieve 5 percent unemployment.

“At this point we have simply documented the magnitude of the challenge before us,” he said. “Our role is to attempt to support our community with relevant data for strategic planning.”

Raso said many of the jobs could come from independent, self-employed workers — jobs not typically included in EDC counts. But the U.S. Department of Labor says the number of independent, self-employed workers will reach 40 percent of the workforce in five years.

“We have to find a way to measure that,” he said. “Because in the end, it’s about job creation — the value of the job, not where it might be located or how it might occur.”

Binnings said he liked the mayor’s boldness.

“I always like ambitious goals,” he said. “And this is ambitious, given the past environment in the state and in Colorado Springs. But this community needs to set goals, move in the same direction and aggressively engage in job development. The economy isn’t going to create jobs on its own. We have to do that.”

What remains unclear: how the city will meet the challenge, if more money will be spent on economic development or if the city will begin to offer more incentives.

Bach declined interview requests to explain his vision of how the jobs might be created.

EDC accepts challenge

The mayor cut $70,000 in Chamber/EDC funding this year, but nonetheless issued the challenge to EDC/Chamber Board Chairman Doug Quimby last week: “This is something his organization will do.”

Raso said that the group had already interviewed a dozen companies in his three-month tenure — and that most of those companies expect to create jobs.

“They say they plan to add a total of about 1,500 jobs,” he said. “And that’s good news. We’re working to get there by creating an existing industries group and engaging that group.”

Even with new growth locally, reaching the mayor’s goal could be difficult. According to the Denver Metro Chamber of Commerce’s website, the Denver metropolitan area announced 3,600 new jobs in 2011. Mayor Bach’s goal is 67 percent more than that.

While Denver’s number includes both existing and new companies, growth in Fort Collins and northern Colorado has largely come from existing companies, Elish said.

“That’s where we’re seeing growth — companies that have put off expanding, but just can’t anymore,” he said. “We’re seeing organic growth that is stemming from pent-up demand. We’re just fostering that growth.”

That seems to be the case in Boulder as well, said Clif Harald, executive director of the Boulder Economic Council.

“The vast majority of our growth is coming from startups, from existing small- and medium-sized businesses that are growing,” he said. “We’re seeing some new businesses move in and had some major announcements, but most of our job growth is local business.”

Unlike the Springs and Denver, he said Boulder doesn’t keep track of jobs created.

Raso said that his strategy will be to foster local business growth, but also to look at the region as a whole.

“This isn’t going to occur within the city limits,” he said. “And it isn’t going to occur within an annual time frame. But we’re going to focus on the region, and job creation will come. But if you come to me next August, and there have only been 2,800 jobs created — and that’s a failure. That’s not true, because job creation has to occur over a period of time — three, five, 10 years.”

Colorado Springs job creation and losses

2011-2012: 627 (estimated)

2010-2011: 270

2009-2010: -2,503

2008-2009: -10,016

2007-2008: -2,276 

MSA unemployment

Pueblo — 11.2 percent

Colorado Springs — 9.8 percent

Grand Junction — 9.4 percent

Greeley — 9.2 percent

Denver-Aurora — 8.3 percent

Fort Collins — 6.7 percent

Boulder-Longmont — 6.6 percent

(Colorado Department of Labor and Employment)

 

2 Responses to Mayor Bach sets aggressive jobs goal, but is it possible?

  1. Good work Mayor Bach.
    It may or may not be an achievable goal but we will never know if we don’t try.

    Joe Bachofen
    August 17, 2012 at 12:53 pm

  2. The article hits the nail on the head to achieve job growth we have to make it easier for existing companies to grow and to thrive.
    The goals in the past were always to get new companies to move to the springs, but i missed the effort for our existing companies.

    how to do that:
    1. remove red tape which blocks businesses (city and council level)
    2. look at ways to help smaller companies to save cost (utilities, cost of material, etc.),

    How can we long term attract more businesses to move here:
    1. play our strength (best city for out doors, sports, etc.)
    2. Make our city a place where young people want to stay
    3. Become more open to new ideas
    4. Create a “fun” city

    just a few ideas….

    peter smith
    August 20, 2012 at 8:25 am