Making It Work in the Mile-High City: Denver’s Rapidly Growing – and Changing – Job Market
- From 2000 through 2015, the majority of job growth in Denver was in the oil-and-gas extraction fields. But more recently, growth in tech and finance has outpaced growth in other fields.
- Jobs in oil-and-gas extraction, tech, finance, general construction and in bars and breweries, among other sectors, are more prevalent in Denver than in the U.S. as a whole.
- Wages for oil-and-gas workers, tech employees and finance experts have grown strongly since 2000.
Denver today is one of America’s fastest-growing and hottest markets, a far cry from the largely rough-and-tumble and relatively slow-moving mountain metro it was even 15 years ago. And as the city has changed, so too has its job market.
Unemployment in Metropolitan Denver is among the lowest in the country, and wages in several key sectors have shown healthy growth. Denver’s growth has been fairly widespread, but a few key industries have shown above-average growth and are heavily clustered in the Denver area relative to the rest of the nation. Once a center for blue-collar workers, the area’s high standard of living and natural beauty are helping attract droves of skilled tech, finance and service employees from across the country.
Based purely on numbers, the lion’s share of Denver-area employees work in retail and food-service industries, similar to most large American markets (figure 1, left panel). But looking at the share of total employment in various sectors relative to the U.S. share, it’s clear that a few fields in particular are driving Denver’s growth more than others (figure 1, right panel).
Denver has more than its fair share of people working in oil-and-gas extraction (these jobs are 5.6 times more prevalent in Denver than in the U.S. as a whole), finance (2.7 times more prevalent in Denver) and tech fields (2.2 times more prevalent in Denver). A growing population and a thriving – and thirsty – beer culture is also helping feed the disproportionate concentration of Denver-area residents employed in bars and breweries. And given Denver’s fast growth, the area also over-indexes on construction workers in general (though less so in residential construction, specifically).
Without a doubt, Denver’s growth over the past 15 years has been anchored by expansion in the oil-and-gas extraction industry. From the third quarter of 2000 through the third quarter of 2015 (the most recent available), the number of people involved in oil-and-gas extraction work in and around Denver rose 133 percent (figure 2, left). The pace of growth in oil-and-gas work over the past 15 years roughly doubled the growth pace of the next two fastest-growing industries over the same time.
But more recently, other fields have begun contributing more strongly to the area’s rapid growth, even as growth in oil-and-gas work remains strong (figure 2, right). Over the past half-decade (Q3 2010 to Q3 2015), the Denver area’s highest-growth industries have been computer-related tech jobs and certain financial services jobs (up 43.7 and 42.5 percent, respectively, since 2010).
And not only are these industries showing strong growth in numbers, they’re also contributing mightily to the area’s broader economic growth through the high wages paid to workers in these fields, many of whom have seen healthy raises over the years (figure 3). Oil-and-gas extraction workers currently earn $3,004 per week, on average, up from $1,611 fifteen years ago. More modest, though still significant, wage gains are seen among the other two highly paid growth industries, financial services and computer-related tech fields, up $516 and $272 a week to $2,256 and $1,932 weekly, respectively.
Fast and healthy job growth brings many benefits, but growth is not without its growing pains. While wages have risen for many, the area’s cost of living has risen even faster. Balancing continued job growth with the desire to maintain the high standard of living and relatively low costs that helped make Denver so attractive in the first place will be a big challenge for the area going forward.
On March 30, Zillow will make Denver the seventh stop on its Housing Roadmap to 2016 tour of America, aimed at discussing housing challenges in the cities most impacted by them. Over the past decade, Denver has become one of America’s fastest-growing cities, with droves of new residents attracted by the city’s legendary beauty and quality of life, and its abundant job opportunities.
But growth does not come without growing pains, and Denver is not immune. Prior to our March 30 discussion, Zillow will publish new research detailing the factors driving Denver’s enviable growth, as well as some of the side effects.
We invite you to please tune in on March 30 to the live-streamed program at: http://www.zillow.com/housing-roadmap/denver
The program will begin at 12:45 PM MT/2:45 PM EST.