Colorado’s population growth slowing, and that could spell economic trouble down the road

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For three decades, workers in other states have viewed Colorado as a land of milk and honey, and their willingness to relocate here has allowed the local economy to prosper. But the day is coming in the not-so-distant future when winning those transplants will get a lot tougher.

“Colorado will have to compete more strongly than ever before for a qualified workforce. If we wait too long, we will fall behind,” state demographer Elizabeth Garner warned Friday at the 38th Annual Demography Summit at The Cube in Denver.

Behind Garner’s warning is a slowing rate of population growth, both in the U.S. and Colorado. Over the past decade, the U.S.population has risen around 1 percent a year and Colorado has grown nearly twice as fast, thanks to strong net migration. But by 2050, U.S. population growth will slow to 0.4 percent a year. Colorado’s rate, which dipped to 1.4 percent last year, will drop to 0.7 percent, according to state forecasts.

Although Colorado has drawn young adults in droves the past decade, the state’s total fertility rate of 1.7 births per woman is now below the national average of 1.8 and below the 2.1 “replacement” rate needed to keep the population stable absent migration, said Cindy DeGroen, projections demographer with the State Demography Office.

That could be a timing issue, in that more births are occurring to women over the age of 30. But as the state’s birth rate is dropping, the state’s population is graying and the number of deaths increasing. As the gap between births and deaths narrows, Colorado will become more reliant, not less so, on people moving here. But a tougher federal stance on immigration is reducing that as a source of future workers, as will labor shortages across the country.

Complicating matters, the state, or at least the Front Range, has failed to provide enough housing for the influx of workers the past decade. Between 2008 and 2016, the homes and apartments built lagged behind what was needed given the number of households forming. That caused rents and home prices to soar.

That supply gap finally reversed last year, but it may be too late. The cost of shelter, the biggest component in the consumer price index, has run 2.3 to 2.4 percentage points faster in Colorado than the rest of the nation, said Chris Akers, an economist with the Colorado Department of Local Affairs.

Surrounding states like New Mexico, Arizona and Nevada have some of the softest job markets in a country where the unemployment rate is at a nearly 50-year low. In theory, Colorado should be an attractive place for those workers to relocate to. But those states have much lower housing costs, reducing the incentive to migrate, Akers said.

Colorado will have to become more self-sufficient in creating the workforce that it will need in the years ahead, Garner said. Strategies to achieve that include getting a larger share of the existing population into the labor force, convincing older workers to stay employed longer and doing a better job of educating the native-born population so they can take more of the highly-skilled jobs now going to people born in other states.