Editor’s note: Aspen has long been an expensive place to live, but not since development of the modern-day ski resort have workers been this squeezed by pay that hasn’t kept pace with the cost of living.
Local and regional data and anecdotal evidence paint a portrait of wages that, while stubbornly heading up, can’t compensate for ground lost in the economic downturn. That’s exacerbated by expensive housing that may consume 50 percent, or more, of a working household’s paycheck.
As the local housing opportunities contract, commute times and the distance that those who travel to work in Pitkin County have increased.
It was against this perfect storm of conspiring factors that the Aspen Daily News examined whether the price of living in paradise has finally reached its tipping point.
“Worth the Cost?” begins today with a look at local salaries and continues this week.
On paper, things are looking up for local workers battered by the Great Recession.
Weekly wages have risen annually since 2011, according to the state’s labor department and as of April, Pitkin County’s unemployment rate was 4 percent, its lowest level in five years.
When all reporting industries are considered, the average Pitkin County employee earns a pre-tax income of $890 a week. The pay scale pendulum swings widely, with housekeepers and food service workers making $632 a week on average, construction jobs paying $1,230 and upper management salaries commanding $2,643 per week.
The figures don’t include independent contractors, such as real estate agents, but do reflect a cross-section of industries covered by the state’s unemployment system, said Joe Winter, senior economist with the Colorado Department of Labor and Employment.
Those average Pitkin County wages are on the upswing after falling about 3 percent between 2008 and 2010, according to data from the U.S. Bureau of Labor Statistics.
While local wages are following an upward trajectory, and are nearly back to pre-recession levels, some believe the chasm between what many workers earn and what it costs to just get by has grown too large, especially when expensive housing is thrown into the mix.
“The ratio of mortgage to rent, divided by monthly take-home, is far higher than 20 to 30 years ago,” said Chris Ryan, a chartered financial analyst and money manager with 17 years of local experience.
Which means, rather than 30 to 35 percent of income dedicated to a roof over your head — a commonly accepted ratio — in the upper Roaring Fork Valley housing can take double that bite.
In a recent survey of U.S. ski towns, Zumper.com ranked Aspen as having the second most expensive rentals, with one-bedrooms averaging $1,750. Aspen finished second only behind Jackson Hole ($2,000/month) but well ahead of Vail/Beaver Creek, where a one-bedroom rental averages $1,450.
Industry sets the scale
With approximately 3,800 workers, Aspen Skiing Co. is the county’s largest private employer.
“Industries set the pay scale” for a community, said Ryan, who added, “larger employers can get away with paying less because of factors such as a firm’s perceived stability” and benefit packages that include housing and health insurance.
Next season, SkiCo will implement an across-the-board raise which will bring the average hourly salary to approximately $19 an hour, according to Jim Laing, chief human resources officer.
SkiCo’s base level salary for lift operators will increase too, from its $10-an-hour doldrums.
“The starting wage this season will be $11.50 an hour plus [up to a] $2 an hour end-of-season bonus for returning employees, totaling $13.50 and hour,” Laing said.
That’s higher than the industry average for this position, which based upon a 2015 survey by the National Ski Areas Association (NSAA) is under $9 an hour. The ski areas group last year fought the federal hike to the minimum wage.
“NSAA (argued) that such a sweeping jump in the minimum wage, extended to so many different entities well beyond federal contractors, effectively amounts to a significant amendment to the Fair Labor Standards Act — the main federal minimum wage legislation — without Congressional approval,” it wrote in 2014.
The NSAA represents everything from mom and pop ski areas to mega-resorts owned by corporations.
Laing said, “When compared to our industry, we actually define the market and regularly pay the highest wage rates for most operational positions.” He added that the company’s benefits package is extended to seasonal and year-round workers.
SkiCo has a housing inventory of about 600, mostly rental beds, in Aspen, Snowmass, Basalt, El Jebel and Carbondale. For seasonal workers, rent is indexed at about one-third of their wage, which “allows our employees to have the other two-thirds of their pay for other expenses,” Laing said.
The town of Snowmass Village is also looking at employee pay increases, according to town manager Clint Kinney. The proposed pay scale adjustment of about 4 percent is an outgrowth of a 2014 town salary survey.
“We need to be able to recruit and retain the best talent. Salary is a component of that,” he said. So is housing, which Kinney emphasized “is an absolutely critical issue.”
TOSV offers 247 rental units, and deed restricted for-sale properties in complexes such as Mountain View, Creekside, the Crossings and Rodeo Place.
Currently, the lowest paid position that’s open in the town is camp counselor, which starts at $13.81/hour. A data entry clerk pays $15.32/hour.
The city of Aspen is now undergoing a pay analysis for all positions, according to community relations director Mitzi Rapkin.
“The city always tries to remain competitive. … It is something we keep in mind all the time. So it’s not like in one single year or on a certain hire the city considers this, but rather it is always a consideration,” Rapkin said.
“And we consider total compensation packages, which is not just salary but other benefits,” she added.
Resort versus rural indicators
A report issued by the Colorado Center on Law & Policy has determined that the amount of money needed to provide “basic needs” in the state increased “dramatically” since 2001. That includes food costs that rose 63 percent and health care costs that jumped 86 percent.
Winter, the state economist, said absent a consumer price index for Colorado (actual data is collected from the Denver metro area, instead, he said), determining local inflation is complicated.
Rural areas in the Western U.S. are lumped together in the same category. And that means “resort areas tend to have a higher rate of price increase and levels than ranching communities in Moffat (County) would,” said Winter.
Pitkin County’s “extremely high land values go hand in hand with expensive housing,” he added.
Which suggests it may be more accurate to compare Aspen and Pitkin County’s cost of living to that of the state’s Front Range. In terms of weekly average salaries, there is no comparison, though.
Whereas, the average weekly salary in Pitkin County during 2014 was $890, in Boulder County it was $1,213. In 2011, the weekly averages were $832 for Pitkin and $1,065 for Boulder.
Over four years, the pay gap between what employees earned on average in Boulder County and Pitkin County widened by $90, from $233 to $323.
Here on the Western Slope industries such as oil and gas development and recently, coal mining, played a part in fluctuating and flattening of wages. Ancillary businesses such as gas stations and groceries are affected as well.
The ground lost in locals’ pay was exacerbated by longer commutes.
In 2011, the most recent year that data is available, 40 percent of the people who work in Pitkin County traveled 25 or more miles to their jobs. That’s up from 33 percent in 2006, according to the U.S. Census Bureau.