Employees in the hospitality and leisure industry have the lowest earnings in the US economy…
— from a 2019 study published in Tourism Management magazine.
I’m pleased to be able to share another thoughtful article by urban planner Chuck Marohn this morning. Mr. Marohn travels the country, urging local government leaders to get their communities off the chairlift to heaven. Turns out the chairlift is powered by unsustainable government and private debt, according to Mr. Marohn’s analysis of urban tax structures — not by actual community wealth.
He’s been arguing, for the past decade, that “growth at all costs” is ultimately taking us in the opposite direction from “sustainability.”
Our children and grandchildren will be paying an enormous price, unless we change our ways. And soon.
If you attended any Board of County Commissioner meetings over the past several years, you might have heard Commissioner Steve Wadley complain that Archuleta County is one of the poorest counties in Colorado… perhaps during a discussion about why he feels comfortable putting the taxpayers deeper and deeper in debt to build new County facilities, using Certificates of Participation, in hopes that future generations can somehow pay off the loans while also funding other (ever-more-expensive) County services.
Yesterday in Part Five, we looked at some government statistics that showed Archuleta County roughly in the ‘middle of the pack’ in terms of per capita incomes in Colorado communities — ranked at 31 out of 64 Colorado counties, with a median family income of about $65,500 per year.
You might assume, from the government-generated numbers in this chart, that Pagosa Springs is in fact a reasonably comfortable place to live, compared to Colorado as a whole. We might assume that the ‘median’ family, with an income of $65,000, is doing fine, and that Archuleta County is not, in fact, one of the poorest counties in the state.
We also looked, yesterday, at Bureau of Labor Statistics weekly wage estimates, and saw that the weekly wages for an employee in Archuleta County is less than $700 a week — or about 59% of what an ‘average’ employee earns in Colorado ($1,180).
This ranks Archuleta County (according to BLS) at position 54 out of 64 counties.
Yes, the ‘median’ family might be doing fine. The ‘median’ employee, not so much.
For the past three decades, our community leaders have argued that we’re a tourist town, and have poured millions of dollars — mostly taxpayer dollars but also business dollars — into promoting Pagosa Springs as a tourist destination. Looking at just one taxpayer-funded agency — the Pagosa Springs Area Tourism Board and its previous incarnation, the Town Tourism Committee — we’ve watched more than $6.8 million spent to promote tourism businesses in Archuleta County in just the past 12 years. There can be little doubt that the marketing effort has been effective, if you look at the growth of Lodgers Tax collections since 2008 — an increase from $393,000 to $857,000 per year.
More than double.
Unfortunately, the people who actually keep the tourism industry functioning — our hospitality industry workers — have not seen a similar doubling of their paychecks. In fact, these employees earn some of the lowest wages in the entire state. But they have seen the cost of their housing double.
Look at this chart from the 2017 Archuleta County Housing Needs Study, written by consultants from Denver-based Economic & Planning Systems:
We’ve shared this chart before, back when it first appeared in that report. It’s a bit confusing to read, with the various overlapping colors and years. Here’s a simplified version, showing only the year 2000:
In the year 2000, slightly more than half of all rental units were priced at less than $749 per month. You could actually afford to live in Pagosa Springs — and work in the hospitality industry — in the year 2000.
Then our governments and businesses spent well over $6.8 million (that’s the amount spent by only one agency) to promote tourism.
And we ended up in this situation:
As we see in this chart, nearly all of the rental housing in Archuleta County is priced above $500-$749 per month. The largest segment of the rental market is at $1,000-$1,499 per month.
This same kind of price increase is being seen among homes available for sale. But our low-paid workforce cannot dream of buying a house in Pagosa Springs. They’re lucky — lucky — if they can find a rental unit that doesn’t cost half their monthly paycheck.
Pagosa’s slow transition from a logging and ranching community — where the wages were low, but the cost of living was equally low — to a tourist resort town — where the wages are low and the cost of living is high — has served certain economic sectors well. A tourism economy tends to generate a healthy level of taxes, compared to the delivery of services needed. So for our tax-funded government employees, the transition has been generally okay. For retirees and second-home owners, the transition has been generally okay. For tourist business owners, the transition has been acceptable. For the owners of retail businesses, things have turned out pretty well. For the real estate industry, the rising price of home sales has been a financial benefit.
For employees who work in the tourist industry and related services, the future is not bright. In fact, it looks pretty darn dark, at this particular point in time. For these particular folks, the chairlift to heaven seems headed in the wrong direction.
I was surprised to learn, yesterday, that the nurse who draws blood at the Pagosa Springs Medical Center is getting paid about $12 an hour. (According to a neighbor familiar with the pay scale there.) That’s a bit unsettling, to me.
Is there anything our government and business leaders can do to make a change in the community’s direction?
Because it sure doesn’t look sustainable… to some of us.