JobWatch: What Latest Data Means for Working Coloradans
By Sophie Mariam
The most recent jobs report showed modest growth, but digging into the numbers, our analysis found we still haven’t caught back up to 2020 job levels. This is especially true for working Coloradans in some of the industries that were hardest hit by the pandemic, such as leisure and hospitality, education, health care, and state and local governments.
Working Coloradans, especially workers in these industries, have been facing the highest exposure to the virus, while simultaneously dealing with the biggest economic consequences. These workers also happen to be disproportionately workers of color and women, who have long faced some of the biggest barriers to economic opportunity.
Now, they’re facing a second wave of economic hardship caused by the pandemic in the form of inflation, which is largely being driven by artificially high international shipping costs, a broken “just-in-time” supply chain, and high fuel prices (though we’ve gotten some relief from record high prices recently). Our economy can’t truly be successful unless those people who work low- and middle-income jobs can get ahead.
Check out all the details in our newest monthly feature: JobWatch.
Meager short-term job growth masks the harm of inflation, sluggish long-run recovery
Colorado’s economy grew by 4,500 new non-farm payroll jobs in June and only 2,200 new jobs in July, according to the most recent jobs report. While these numbers seem to indicate modest economic growth, these short-term gains may mask the harms of the lagging long-run recovery in state and local governments, education and health, and the leisure and hospitality sectors.
Recent inflation has been driven largely by a broken, unsustainable, inequitable “just-in-time” supply chain that was never fair for workers. Meanwhile, wages have been lagging behind rising prices. While Colorado’s working people bear the brunt of persistent inflation at gas pumps and grocery stores across the state, billion-dollar corporations are pulling in “astronomical profits” using inflation as an excuse to keep shareholders rich at all our expense.
While job growth may have supported a small drop in the unemployment rate from 3.5% in May to 3.3% in July, zooming out of the monthly data paints a new picture. Colorado’s unemployment rate is still 0.5 percentage points higher than it was in February 2020, ranking 5th worst in the nation for overall recovery.
Workers, especially immigrant workers, in Southern Colorado and other rural areas of the state are also being hit the hardest by the slow growth. The Colorado counties with the highest unemployment rates in June were Huerfano, Pueblo, Las Animas, Fremont, and Rio Grande. These industries and rural regions tend to employ low-wage workers, immigrants, women, and workers of color at high rates, indicating that even throughout the recovery, the pandemic has exacerbated pre-existing barriers to economic opportunity for these groups.
Colorado is still suffering economically from the COVID recession
Colorado has added 43,300 new jobs since the pandemic began in February 2020. However, the state’s economy needed to expand by 74,300 new jobs to have kept up with the booming 2.6% population growth during that time. Despite recovering the initial pandemic-related job losses, Colorado’s economy is still experiencing a “jobs deficit” of 31,000 jobs. The Colorado Department of Labor and Employment reports that Colorado’s job growth rate over the past year is 3.6 percent, lagging behind the U.S. rate of 4.2 percent. (One note: while CDLE reports a job recovery rate of over 110%, this figure does not factor in population growth.)
One bright spot, which should come as no surprise to most Coloradans: people want to work. The share of Coloradans participating in the labor force jumped to 69.5 percent in June, the highest since March 2020, and held steady in July.
Workers are struggling to keep up as wages get eaten up by high inflation
Workers are seeing their wages go up, but inflation is eating up most of the gains, forcing many hardworking Coloradans to draw down their savings or take on debt to keep up with spiking prices. CDLE establishment survey numbers indicate that average hourly earnings grew from $31.60 to $34.21 in June and $34.60 in July, placing Colorado $2.23 above the national average hourly earnings of $32.37.
Inflation isn’t being driven by wage growth, according to the Economic Policy Institute. Their study hows that while nominal wage growth over the past year has been faster than recent decades, it has lagged far behind historical inflation.
Some help may be on the way for the lowest-paid workers: Colorado’s minimum wage is expected to get a hefty increase due to high inflation, and local governments like Denver are also expecting to see raises for workers. Increasing local minimum wages to reflect rising living costs has been shown to protect households without stoking inflation, empowering working people to put food on the table for their families and afford gas at the pump.
Denver is set to increase its minimum wage by 9% to $17.29 in 2023, and Colorado’s state minimum wage will increase to an estimated $13.68 this January. It’s good policy to protect working Coloradans from rising prices instead of forcing them to foot the bill for the real culprits behind inflation: corporate price gouging, a broken supply chain that was designed to put profits over service, and global political turmoil.
Unemployment still exceeds pre-pandemic rates
The economy is a far cry from the days of double digit employment like we saw for much of 2020, but not all Coloradans who are looking for jobs have been able to find them. The state unemployment rate is still 0.5 percentage points higher than in February 2020, when it was 2.8%.
While the July jobs report estimates a 3.3% unemployment rate, placing Colorado 0.2 percentage points below the current U.S average, the change in long-run unemployment levels since pre-pandemic times tells a different story about Colorado’s recovery. The U.S unemployment rate has recovered to its pre-pandemic levels, while Colorado is still 0.5 percentage points behind, indicating that the state’s economy is lagging the national trend.
This is especially concerning once we account for the current barriers to accessing jobless benefits in Colorado. As of August 16th, CDLE estimated a 10- to 12-week backlog in processing unemployment claims, leaving many workers who lost their jobs through no fault of their own in the dark. Recent economic evidence from the National Bureau of Economic Research suggests unemployment benefits help bolster spending power, contributing to a growing economy that benefits all Coloradans. Simultaneously, these benefits do not have a significant impact on job-finding behaviors, empowering working families during tough times without disincentivizing work more broadly.
