After 18 years as an academic economist, I’ve had the privilege of serving as director of the UCCS Economic Forum since July 2023. This been a great opportunity for me to dig into the data about this wonderful community. Overall, though we certainly have some challenges, the data paint a picture of a prosperous, midsize-city economy.
For example, according to the Census Bureau, in 2023, median household income in the Colorado Springs Metropolitan Statistical Area (MSA) — El Paso and Teller counties — was $89,792. That’s considerably higher than the national figure of $77,719 and 48th out of 387 MSAs (i.e., we’re in the top 15%).
Initially, I was unsure about how to reconcile this with reports that our wages are “lagging,” but after some thought, I recognized that these reflect a basic error of interpretation. The view that we have a problem with low wages is based on data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW). According to this data, average annual pay in El Paso County in 2023 was $64,688, compared with $72,360 for the U.S. overall.
When we consider this data, we need to take into account the skewed income distribution in the United States. There are a fairly small number of people earning huge amounts of money — e.g., top executives of major corporations, partners in New York law firms and investment banks, pro athletes and other entertainment superstars are paid tens of millions of dollars per year.
These ultra-high incomes will pull up the averages where they reside. Where do we find such people? Typically, not in midsized cities such as Colorado Springs. And here it is important to note that the QCEW data includes stock compensation — mostly received by people at the very top of the income distribution.
We certainly have plenty of well-to-do people here, but we lack the ultra-high incomes that pull up the averages in places like New York, San Francisco and Denver (and, therefore, for the U.S. overall). That does not mean that the typical Colorado Springs resident is suffering from unduly low wages.
A better way to see how employees in this community are doing is to look at wages in the middle of the income distribution — i.e., median wages. According to a different Bureau of Labor Statistics data set, the median full-time wage in Colorado Springs was higher than the national median. This is corroborated by the Census Bureau’s estimates of median earnings, which also show us above the national median (this differs slightly by including part-time workers and the self-employed).
With the uneven distribution of income, averages are higher than medians, locally and nationally, but the median Colorado Springs worker is taking home a wage higher than the national median. So, relax, Colorado Springs — our wages aren’t “lagging.”
Bill Craighead is program director of the UCCS Economic Forum. The 29th annual UCCS Economic Forum will be held on Oct. 2. More information is available at business.uccs.edu/economic-forum.