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Colorado Recovery Watch

Revised employment data show Colorado’s jobs situation was and continues to be much worse than previously thought. New figures from the Bureau of Labor statistics show Colorado’s unemployment rate has not come down since the official end of the recession, the state labor force has been shrinking, and job levels have been flat for a year and a half. To cap off the bad news, in January Colorado’s unemployment rate surpassed the national rate for the first time since before the recession.

Unemployment
Colorado’s January unemployment rate rose to 9.1 percent. (Figure 1) That is the highest rate on record since the Bureau of Labor Statistics began tracking state unemployment in the 1970s. January’s increase marks the first time since the middle of the decade that Colorado’s unemployment rate was higher than the national rate. Colorado’s unemployment now ranks 19th worst among states, and its increase in unemployment since the beginning of the downturn (December 2007) ranks 12th largest.1 High unemployment is likely to be a fixture of the state economy for some time to come. Colorado’s unemployment rate is forecasted at 8.4 percent for 2011, and 8.2 percent for 2012.2 Those forecasts might be revised upward in light of the updated jobs estimates.

Recent unemployment compared to past recessions
Colorado’s recent recession has left unusually high unemployment in its wake. Typically, unemployment in Colorado subsides a year and a half after the onset of recession. Yet today, Colorado continues to experience very high unemployment three years on. (Figure 2)

 

Unemployment rate and the labor force
The unemployment rate has an important relationship with the size of the labor force. To be counted as unemployed, a worker must be actively looking for a job. In technical terms, that means the worker must be in the labor force (the total number of workers with jobs or looking for work).

Thus, changes in the labor force can have a big effect on the unemployment rate. For instance, if the economy is suffering, unemployed workers may stop looking for work, thereby decreasing the labor force, and keeping the unemployment rate down. The new revised data suggest that was the case in Colorado the past year and a half. (Figure 3)

Conversely, when the economy improves, workers resume looking for jobs and re-enter the labor force. In doing so, they are once again counted as unemployed, and the unemployment rate might spike with their reentry. Judging from recent data, a similar unemployment spike may be in store for Colorado in 2011. (Figure 3)

 

Employment
Recessionary employment losses in Colorado have been dramatic. (Figure 4) Since the onset of the downturn (December 2007), Colorado has lost 127,000 jobs, or 5 percent of its nonfarm labor force. That loss ranks 24th worst in the country.4

Colorado’s post-recessionary employment has been more stagnant than was previously thought. In January, Colorado effectively had the same number of jobs it did in June 2009 when the recession ended. (Figure 4) That means that jobs in the state did not even keep up with population growth the last year and a half. (Figure 5) Such stagnation is a far cry from the strong jobs rebound many were hoping for, given the depth of the downturn.

 

Job shortfall
Job shortfall measures the difference between actual employment and what employment would need to be to keep up with population growth. Tracking from the onset of the recession in December 2007 the Colorado job shortfall stands at roughly a quarter-million jobs. (Figure 5)

 

Medicaid and CHP+
In recent years, Colorado has seen consistent and substantial caseload growth in Medicaid and the Child Health Plan Plus (CHP+). Those programs provide medical care for low-income residents and children, respectively. In January 2011, the Medicaid and CHP+ programs served 624,000 Coloradans.5

Enrollment growth in CHP+ and Medicaid accelerated during the recession and continues to outpace population growth. (Figure 6) In the current fiscal year, total program enrollment has grown by 35,000, or 6 percent. By contrast, during this period the state population grew 0.9 percent, adding 48,000 residents. That means that combined Medicaid and CHP+ caseload is growing six times as fast as the state population. As the effects of the recession reverberate and need continues to grow, those programs are increasingly crucial in providing health and security for vulnerable Coloradans.

 

Food assistance
The recession touched off a substantial need for the food assistance provided by the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. As with the state’s public health insurance programs, that need continues to grow a year and a half after the official end of the Great Recession. (Figure 7)

According to the most recent count in December 2010, 441,000 Coloradans receive food stamps. (Figure 7) That is up another 6,000 people from the month before, completing a quarter of particularly heavy growth. Overall, SNAP enrollment has increased 78 percent since the beginning of the 2007-09 recession.6 Clearly, SNAP continues to be a lifeline for many amidst Colorado’s painful recovery.

 

Eligible but not enrolled
It is important to note food stamp enrollment does not fully reflect hunger in Colorado. According to the latest estimates, only 52 percent of Coloradans eligible for SNAP are enrolled. That ranks 48th in the county among states.7

Colorado’s poor performance is largely driven by problems administering food assistance. Eligible clients are required to complete a 26-page application, show multiple forms of identification and lawful residence documents, and verify income every three to six months. Furthermore, the Colorado Benefits Management System (CBMS) database, which is used to administer SNAP and other Colorado assistance programs, is plagued with problems. Since its introduction in 2004, CBMS has consistently failed to deliver timely application processing, and has exhibited unreliable performance. Colorado needs to improve CBMS and its administration of assistance programs to ensure that eligible families get the help in this unprecedented time of need.

 

A reality check
The new employment figures underscore what working Coloradans already knew to be true — the pain caused by the recession has not yet let up in Colorado. As the state moves into 2011, it can expect a year of discomfort, and hopefully some relief.

Contact: Alec Harris
Policy analyst
303-573-5669, ext. 316

Released March 11, 2011

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

2 “Focus Colorado,” Colorado Legislative Council Staff, Dec. 20, 2010.

3 Also, 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 Analysis of “Premiums, Expenditures and Caseload Report,” Colorado Department of Health Care Policy Financing, January 2011 report.

6 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “December 2010 SNAP/Food /Stamp Participation Data,” Food Research and Action Center.

7 “State Supplemental Nutrition Assistance Program Participation Rates in 2008,” U.S. Department of Agriculture: Food and Nutrition Service, December 2010.

 

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