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Colorado Recovery Watch

The nation experienced little change in the labor market during June. While a majority of states had unemployment rate increases, Colorado was one of eight that recorded a decrease in the unemployment rate. Moreover, jobs continue to grow across the state. However, Coloradans still feel the pain of the recession as enrollment in medical assistance programs continues to rise and the need for food assistance remains high.

Unemployment
In June, as the national unemployment rate rose from 9.1 percent to 9.2 percent, Colorado’s unemployment rate decreased from 8.7 percent in May to 8.5 percent. (Figure 1) It was the fifth consecutive month Colorado’s unemployment rate decreased. Colorado’s unemployment rate remains below othe national average, yet ranks 29th worst among states. Since the onset of the recession in December 2007, the increase in the unemployment rate ranks 13th in the country.1

High unemployment is likely to be a fixture of the state economy for some time. Colorado’s unemployment rate forecast has improved, decreasing to 8.5 percent for 2011, 8 percent for 2012, and 7.3 percent for 2013.2

Current unemployment compared to past recessions
Though all recessions in the past 30 years affected Colorado’s unemployment rate, the 2007-09 recession has had an unusual residual effect on Coloradans. Compared to previous recessions, the 2007-09 recession created an unemployment rate not only higher than in the past, but also more long-lasting. (Figure 2) While previous recessions have returned to the average rate of about 6 percent after two years, today Colorado continues to experience high unemployment more than three years later.

 

Unemployment rate and the labor force
The unemployment rate is based on the size of the labor force, which excludes anyone not actively searching for work. A spike in the unemployment rate can be a sign of recovery as previously discouraged workers return to searching for employment. Colorado experienced that spike in previous months, but in June both the unemployment rate and labor force decreased. (Figure 3) The decreasing unemployment rate is in part tied to a shrinking labor force.

 

Employment
June figures show Colorado lost 115,200 jobs since the start of the recession in December 2007, a rate that ranks 28th worst in the nation.4 (Figure 4) Despite those dramatic employment losses during the recession, Colorado is showing signs of a slow recovery with a steadily growing employment rate this year.

The state has experienced an increase in jobs each month for the past six consecutive months, effectively adding 15,000 jobs during that time. In June alone, the state gained 4,500 jobs. Despite the bright indicators, Colorado will continue to face challenges in providing employment.

 

Job shortfall
The job shortfall measures the difference between actual employment and what employment would have been if jobs had continued apace with working-age population growth instead of plummeting during the downturn — in short, how far the state has been “set back” by the recession in jobs.

Colorado's jobs shortfall, or the difference between the number of jobs Colorado has and the number it needs to regain its pre-recession employment rate, is 255,100. That number includes the 114,200 jobs Colorado lost plus the 140,900 jobs it needs to keep up with the 6 percent growth in population Colorado has experienced in the 42 months since the recession began.5 (Figures 5 and 6)

 

 

Medicaid and CHP+
Since the onset of the economic downturn, Colorado has seen consistent and substantial caseload growth in Medicaid and Child Health Plan Plus (CHP+). (Figure 7) These programs provide medical assistance to low-income residents and children, respectively. The programs received an additional 4,000 Coloradans in June, bringing the total enrollment level to 654,685 Coloradans.6 The combined caseload growth for Medicaid and CHP+ is more than six times faster than the state’s population growth in the current fiscal year. As Coloradans increasingly depend on these programs for medical care during the recovery, their importance should not be understated.

 

Food assistance
As with the state’s public health programs, the need for nutrional assistance has grown dramatically since the start of the recession. According to the most recent count in April 2011, 454,810 Coloradans receive nutrional assistance from the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. (Figure 7) This is a decrease of 440 people from March 2011. The April 2011 report is the first time the number of Coloradans seeking food assistance has decreased since May 2008.7

Despite the small decrease, there is still an 84 percent increase in usage from the onset of the recession. That is indicative of the large number of Coloradans struggling during the economic recovery.

 

Varied indicators
Though there are positive economic indicators that show signs of a recovery, the impact of the Great Recession stretches wide and cuts deep. While the unemployment rate has decreased and employment levels rise, Coloradans still struggle with joblessness and economic insecurity. The increase in health and food assistance, our most basic needs, gives us an understanding of the tremendous impact the recession has had on our state. Colorado appears to be on a path towards recovery, albeit slow and not without challenges ahead.

Contact: Ben Felson
Colorado College/Rice fellow
303-573-5669, ext. 316

Released July 22, 2011

End notes
1 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.

2 “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Jun. 20, 2011.

3 Colorado Legislative Council Staff for the chart design.

4 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.

5 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.

6 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing .

7 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “April 2011 SNAP/Food /Stamp Participation Data,” Food Research and Action Center.

 

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