Colorado’s economy continues to improve from the worst of the COVID-19 pandemic, but that was expected as businesses adapted and employees returned to work. We are, after all, nearly two years from Spring 2020’s massive business disruptions.
What makes Colorado’s economy stand out is how much better — or worse — it has recovered compared to the other states. Check out these stats shared Thursday by the Secretary of State’s office in its annual Quarterly Business & Economic Indicators report, along with other economic data from the Bureau of Labor Statistics:
- 4th — Labor participation rate (that’s the number of working-age adults who work or are looking for work). The state was at 68.3% in December and had 3.2 million people in the labor force, the highest in the state’s history. While not everyone is back at work, the state’s population also grew during the pandemic.
- 10th — Colorado’s gross domestic product increased 5.5% in the third quarter 2021 from the same quarter a year ago, ranking 10th nationwide. For 2021, the U.S. GDP grew 5.7%, or the fastest growth rate since 1984 (full-year state data is not available).
- 9th — Colorado’s per capita personal income reached $68,106 while income growth rate rose 7.8%, or the fifth highest nationwide. Between second and third quarter 2021, Colorado had the second largest increase in personal income.
- 14th — Colorado’s job recovery since the dark days of spring 2020. The state has regained 335,500 of the 376,300 jobs lost in March and April 2020.
- 19th — Weekly wage growth. Colorado’s weekly wage grew 5.7% in December from a year ago.
- 34th — The state’s unemployment rate was 4.8% in December; the U.S. was at 3.9%.
“With strong gains in the hospitality industry, Colorado has gained back 89% of jobs lost at the beginning of the pandemic in March to April 2020, compared to an 84% recovery rate nationally,” said Jena Griswold, Colorado’s Secretary of State, during a Thursday news conference.
“While our recovery continues, we all know there still a lot of work to be done. GDP increases mean little to the family whose money at the grocery store doesn’t go as far as it used to or seeing their heating bills increase during the winter months. Coloradans’ resilience has been tested and it will continue to be tested. But I’m confident that today’s report shows we’re moving in the right direction,” she said.
She credited state and local government relief plans to keep workers and employers from getting too far behind. She’s also pushing to lower fees for business filings with House Bill 1001, which would reduce fees for common filings like starting a new business to $1. The year-long fee reduction would need $16.7 million in support from the general fund.
Colorado had a record year for new business startups, even though the numbers declined after an unusually high first quarter. But the strong start-up numbers support U.S. data that Colorado had some of the highest rates in its history of people quitting their jobs. Many spent time reassessing their future, and some went on to start their own business.
Small businesses less optimistic
But it’s small businesses that are less optimistic about the future, said Richard L. Wobbekind, senior economist and the associate dean at the University of Colorado Boulder’s Leeds School of Business. He pointed to the new ADP National Employment Report, published by ADP Research Institute, that looks at nonfarm jobs in the private sector. The U.S. lost 301,000 jobs from December to January, which Wobbekind said was likely due to the rise of the omicron variant during the period.
The data shows “almost half of those job losses (are) with small businesses,” Wobbekind said. Small employers have more difficulty raising wages if they can’t find workers, or getting the supplies they need when there’s delivery issues or shortages. The impact on small businesses has impacted confidence in their future.
“When we look at business confidence surveys for bigger companies like the Institute for Supply Management, they’re still expressing a lot of confidence in the growth of the economy,” Wobbekind said. “But we’re not seeing that same level of optimism when we talk about Main Street businesses and of course this is extremely important overall for the nation, but certainly for Colorado so we are keeping a close eye on the confidence level of business at the state level.”
The rise in COVID also hurt some industries more than others, but especially the leisure and hospitality industry, plus mining and logging, which will continue to face challenges.
The upbeat news, however, is that things appear to be leveling off. On Friday, a surprise jobs report had the U.S. gaining 467,000 jobs in January, instead of losing jobs because of omicron.
While inflation has risen, Colorado fared better in December than the nation and posted a lower rate of inflation than the U.S. for the first time in nine years.
The state’s consumer prices saw a 3.5% inflation rate in December for the cost of all goods (not seasonally adjusted) in the Denver metro area and a 2.5% increase in all items excluding food and energy. The rates for the U.S. were at 4.7% and 3.6% respectively.
Brian Lewandowski, executive director of the Business Research Division at CU’s business school, theorized that Colorado prices grew at lower rates in areas like housing, food and transportation because the state led on higher prices early on in the pandemic. Other states and the nation are catching up.
“Looking at the components, it appears that the slower price growth in 2021 was due to slower growth in the housing, transportation and food components of inflation,” Lewandowski said in an email. “Perhaps our housing prices led the nation early, and moderated a bit ahead of the nation (increased at a slower rate)? The transportation component makes sense — we tend to have lower gas prices than the nation.”
→ VIEW: Colorado Secretary of State’s Quarterly Business & Economic Indicators for fourth quarter 2021
More on the Great Resignation
If you want to hear a dozen Coloradans explain why they quit their jobs, you can catch up with my earlier story and learn additional reasons, “Why Coloradans have quit their jobs: ‘What price my soul?’”
The stories came from What’s Working readers who helped shape the story. Thank you to those who shared (you can still share and help my ongoing research HERE).
TLDR: People quit but mostly didn’t stop working. They moved on to jobs that paid better or offered more flexibility. Some decided to retire early, which is not technically categorized as “quitting” but a “separation” by the BLS Jobs and Labor Turnover Survey. More money was a motivating factor but not the only one. This great “reassessment,” as some preferred to call it, was about being treated right by employers, getting better work/life balance (such as remote options) and realizing that there were a lot of job opportunities available.
I also didn’t share every single reader’s response — about three dozen offered feedback. However, just for readers of the column, here’s how responses lined up:
Cut hours or staff?
At least one economist doesn’t think the Great Resignation is ending soon. That’s Luke Pardue, lead economist for payroll services provider Gusto in Denver. His company has insight into thousands of businesses so Gusto does its own job-quitters analysis. In January, more Coloradans quit their jobs than in December.
“What we’ve seen is that the Great Resignation has shown no signs of letting up. In fact, it’s accelerated in Colorado,” he said. “In January, the quit rate rose from 3.4% in December to almost 4% in January, which is higher than the 2.9% that we saw in January of 2021.”
The U.S. figure, for comparison, was 3.5% in December and 3.7% in January, according to Gusto data.
Quit rates come from the Job Openings and Labor Turnover Survey, or JOLTS report, from the Bureau of Labor Statistics. It estimates how many people quit, were laid off or left their jobs for other reasons, compared to the overall working population. The Colorado JOLTS data for November just came out. Gusto tracks data in nearly real time.
Pardue said the higher rates in January are likely due to the rise in omicron cases. But he notes that also in January, employers cut worker hours — not jobs. Between November to January, employers cut worker hours by 23%, compared to 18% in the same period a year earlier.
The explanation? Employers realize how difficult it is to hire new employees so instead of laying them off, they limit the hours in order to keep the business sustainable.
“It’s just not financially viable right now (and) it’s certainly true in Colorado that businesses are in the wild wild west of this pandemic where they have to determine for themselves what the best way to adjust is,” he said. “Oftentimes, that means closing for the lunch hour or only being open four days a week. And that shows up in terms of lower hours worked for employees.”
Labor shortages had already caused some restaurants and small businesses to limit hours, but some restaurants are still limiting service hours or closing temporarily due to skeleton crews and quarantined staff or customers still hesitant to stop by.
“Employers are trying to navigate (their business) knowing that growth is on the horizon and they need to adjust to slow down to demand that comes with each new wave of this variant,” he said. “The termination rates in Colorado were not that different, which tells me that employers are working hard to hold on to workers so that when this next wave ebbs, we can have a quicker expansion.”
In a survey Gusto did with the National Association of Women Business Owners, small employers shared how they’ve adjusted to the Great Resignation and how to retain workers. While most offered retirement plans, one in five also offered paycheck advances or a personal loan. Other benefits offered included financial literacy programs, a college savings plan and savings or checking accounts.
“The most common reason that employers cited for offering those benefits was employee retention and talent attraction,” he said. “Businesses that might not be able to compete as hard on wages are now looking to other financial benefits.”
→ RELATED: The gender gap among workers who are quitting their jobs also reached the highest level since August in Colorado, according to Gusto data. While the difference shortly after the pandemic began in spring 2020 was at 0.2 percentage point, it’s now 0.94 with quit rates of women at 4.49% and men at 3.56%.
→ Maybe it’s the industry? A small business poll by Alignable, a network for small business owners, found that 30% of respondents have fully recovered from the pandemic. But 60% still can’t find enough workers, and that’s holding back their recovery. Hardest hit? Assisted living and senior care centers. Check out Alignable’s chart:
The King Soopers contract
If you followed the United Food and Commercial Workers Local 7 strike at King Soopers last month, the new grocery store union worker contract is finally public.
After nine days of picketing, most workers will get a $2 per hour increase in pay in the first year with some seeing up to $5.99, according to union officials. The starting wage is $16 an hour and the new contracts apply to stores in Denver, Colorado and Pueblo, where retail contracts expired last month.
Safety concerns with unruly customers became an issue for union members. But an effort to get off-duty police officers to serve as security wasn’t agreed to. Rather, the contract only leaves it open to further discussion.
There’s also a new pandemic safety measure that requires the company to meet and bargain with the union on a new process to address any health and safety concerns of employees. If King Soopers plans to implement a vaccine mandate, it also must meet with the union at least two weeks before the mandate’s effective date.
→ View the King Soopers contract
Other working bits
→ Are you a new founder? Then the Telluride Venture Network has a Work From Anywhere boot camp that may interest you. The organization is offering two weeks of mentoring and help for early-stage tech or consumer product startups. Companies are judged by what they offer rural communities with past boot camps focused on mining reclamation, clean water and plastics alternatives. The work-from-anywhere label is more about how the company operates, which should include a remote or hybrid work environment. The boot camp itself, which costs $1,000 though the fee could be reduced for promising startups, requires one week in Telluride. >> DETAILS
→ Tech apprenticeships — CareerWise Colorado has teamed up with local technology organization CompTIA on the CompTIA Apprenticeships for Tech and is seeking young folks interested in careers in technology. That means it goes both ways and works with both interested job seekers and employers that need help. >> DETAILS
→ Want to drive a big truck? Yes, there’s still a commercial driver shortage. And a new federal requirement that starts Feb. 7 requires more training. Colorado Department of Revenue is trying to make it easier and points candidates to the list of approved instructors and schools at the National Training Provider Registry. >> See training programs
→ Another Jeff Bezos company in South Denver — Sure, we know that other big company founded by Jeff Bezos. But his other one, Blue Origin has arrived in Highlands Ranch, reports The Denver Business Journal. The space company is also hiring. >> SEE JOBS
→ Only one-fourth of the Paycheck Protection Program went to jobs at risk. A new study found that $800 billion federal relief fund aimed at helping small businesses retain workers actually went to workers, reports The New York Times. >> STORY
Thanks for reading! Feedback from readers is great so if you have a job, resource or other tip you’d like to share with What’s Working readers? Email me at [email protected] ~tamara
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