Colorado Recovery Watch
In April, a majority of the states had a slight decrease in unemployment rate from what was reported in March. That month, Colorado had a significant decrease in unemployment rate compared to other states, indicating recovery in the labor market. However, the state remained at the same level of employment as the previous month. Still, as the economy turns around, Coloradans continue to feel the pain of recession.
Current unemployment compared to past recessions
Colorado experienced unusually high unemployment during the 2007-09 recession. During past recessions, unemployment returned to previous low levels after approximately two years. However, more than three years have passed since the start of the past recession, and the unemployment rate is still extremely high. (Figure 2)
Unemployment rate and the labor force
The unemployment rate consists of individuals in the labor force not currently employed. Workers are considered unemployed only if they are seeking jobs. Workers who have given up searching do not count as part of the labor force and are not included in the unemployment rate. During a recovery period, the unemployment rate often spikes as laid-off workers who had given up on finding work resume the job hunt. In previous months, Colorado began experiencing such a spike. However, April employment levels are sustained while the unemployment rate begins to decrease. That could be the start of the long-hoped recovery.
Recessionary employment losses in Colorado have been dramatic. (Figure 4) In March, Colorado was down 122,200 jobs, or 5.2 percent of its nonfarm labor force since the onset of the downturn in December 2007. That loss ranks 20th worst in the country.4
Although, Colorado has shown signs of recovery in employment, April employment remained at the same level reported in March. The state is up 6,200 jobs from six months ago and has posted modest but steady employment gains in the past quarter. Even though the state’s employment level has slightly improved compared to previous months, Colorado has a long way to go before reaching employment levels seen before the 2007 recession.
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. Tracking from the onset of the recession in December 2007, Colorado’s job shortfall stands at roughly a quarter-million jobs. (Figure 5)
Medicaid and CHP+
Since the beginning of the recession, Colorado has experienced substantial growth in Medicaid and Child Health Plan Plus (CHP+), indicating the increase in the number of low-income residents and children in need of state medical assistance. In April, those programs provided aid to 648,924 Coloradans, only 294 more than the previous month. That represents the first sign of slowing caseload growth this year. Caseload had been increasing by roughly 5,700 new people each month.5
As well as for health care programs, there has been a dramatic increase in need for the food assistance provided by the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. (Figure 7)
According to the most recent count in February 2011, 443,661 Coloradans receive food stamps. (Figure 7) That is 44,799 more people than a year earlier. Overall, SNAP enrollment has increased 79 percent, or 195,886 individuals since the beginning of the 2007-09 recession.6 Such tremendous growth in need demonstrates the force of the Great Recession.
Eligible but not enrolled
Food stamp enrollment does not fully reflect hunger in Colorado. According to a recent study by the U.S. Department of Agriculture (the federal agency that oversees SNAP) only 52 percent of Coloradans eligible for SNAP are enrolled. That ranks 48th in the county among states.7
Colorado’s poor performance is driven largely 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, continues to be riddled with problems. Since its introduction in 2004, CBMS has consistently failed to deliver timely application processing, and has exhibited unreliable performance. The new governor’s administration has stated improving CBMS, application process and county business processes are top priorities. Hopefully, those improvements will ensure a greater number of eligible families get the help they need, when they need it.
On the road to recovery?
The employment and unemployment data for April show signs the recovery is taking hold in Colorado. While still high, Colorado’s unemployment rate had a statistically significant decline from the previous month and once again fell below the national rate. Employment held steady, with modest growth over this time last year. And most encouraging, the demand for basic safety-net services – food and medical care – also remained level over last month rather than continuing to climb at an alarming rate. Those are all positive signs a strong recovery may be under way.
Contact: Valeria Caso
303-573-5669, ext. 317
Released May 20, 2011
1 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data May 20, 2011.
2 "Focus Colorado: Economic and Revenue Forecast," Colorado Legislative Council Staff: Economics Section, Mar. 18, 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 Analysis of "Premiums, Expenditures and Caseload Reports," Colorado Department of Health Care Policy Financing .
6 Analysis of U.S. Department of Agriculture SNAP program data, provided by: "February 2011 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, January 2011.