A new study by Stateline shows personal income has risen more around the Mountain West than anywhere else in the U.S. But that wage increase may not translate into more buying power.
The study found that in the last four years, incomes rose nearly 10% around the region. In many of the states that saw an increase, residents could enjoy a higher standard of living after the wage increases. But in urban areas, those gains may have been swallowed by rising housing costs.
Economist Phyllis Resnick with the Colorado Futures Center, a nonprofit economics research group connected to Colorado State University, said the wage increases come down in large part to supply and demand.
“When you have a labor market like we've had, where there are more job openings than there are people to fill those jobs, you would predict that you would see wage pressure,” Resnick said.
She also said not everyone suffers equally when housing prices increase.
“If you're new to the area, or if you're less stably housed and more subjected to rental markets, I would suspect that a good portion—if not more than all of that increase in what you're earning—is being offset by an increase in your cost of housing,” Resnick said.
Further cost-of-living increases may eventually slow economic growth at the regional level.
“In Idaho, around Boise, and Utah, around Salt Lake City…everyone's starting to wrestle a little bit with the challenge associated with that increased cost of living,” Resnick said.
Employers often have to pay more to attract workers to live in places with rising housing costs. But Resnick expects the housing trend to slow down as the pandemic impacts that spurred flight to rural communities begin to reverse.
Utah, Montana and Colorado all saw incomes increase by about 8% over the past four years. Idaho saw about 7% growth, Wyoming saw a 5.5% increase, New Mexico had a 5% increase and Nevada incomes grew only about 4 percent.
