How optimistic are you about Colorado’s economic recovery? If you were one of the 250 business leaders surveyed for the University of Colorado business school’s recent quarterly economic report, your optimism was at “a record high.”
“It was around the reopening of the economy, the vaccination rate and demand,” said Brian Lewandowski, executive director of Leeds Business Research Division at the University of Colorado that was behind the latest quarterly Colorado Business Review survey. “But more people typed ‘demand’ than I’ve ever seen used in a general survey like this.”
That would be demand for the company’s services or products. The economic optimism shouldn’t come as much of a surprise. COVID-19 cases have been on the decline and vaccinations are widely available now. More people are working again and spending money. Nearly half of the respondents surveyed credited “normalization of activities.”
But the report goes on to show that business leaders, with representatives from all industries, felt COVID’s impact on the economy and their business was not as bad as originally feared.
- One third said their sales never decreased, and nearly 19% said sales have already returned to pre‐pandemic levels.
- Most expect their company’s employment to return to pre-pandemic levels sometime between September and the end of next year.
- And Colorado’s real gross domestic product fully recovered from the recession by March 31, “recouping all of the losses from the recession.”
While the “optimism” is based on opinions of business leaders and their own operations, there’s evidence that it’s true. Lewandowski said last year’s recession was simply unlike any other. Home prices rose. Personal income increased. Some industries reported their best year ever.
“Even segments of the retail sector had their best year ever,” he said. “If you were selling the right goods, (such as) outdoor equipment, best year ever. If you were selling home improvement, like the Home Depot’s and Lowe’s of the world, there was just phenomenal growth.”
While Colorado saw a record number of jobs lost when the pandemic hit in March 2020, many of those jobs have returned, though we’re still down 64,800 private payroll jobs (the state lost 349,200 in April 2020). Employers in the Leeds survey feel all those jobs will be back by late next year.
On Friday, the Colorado Department of Labor and Employment released new data for June that seemed less optimistic. After growing for months, the state’s labor force shrunk in June by 2,200 people, according to the U.S. Census’ Current Population Survey.
The state’s labor force participation rate is now at 68.5%, down from 68.7% in April, which was the same rate as February 2020 (and up from a low 64.9% in April 2020). This doesn’t mean everyone who had a job before is back to work. It just means that the number of people working or looking for work compared with those who aren’t is nearly the same as before the pandemic.
However, advised Ryan Gedney, the Department of Labor’s senior economist, one month’s worth of data doesn’t tell the complete story. Rather, look at the past 12 months instead.
“I think we’re going to see the labor force participation numbers bounce around a bit,” Gedney said. “Over the past year, the labor force has grown by 42,000 in Colorado. All told, the labor force decline of 2,200 is pretty low. And keep in mind, that’s out of a labor force of 3.1 million.”
6.2% ~ Colorado’s unemployment rate
While June saw a decline of 2,000 people on unemployment benefits, those numbers were offset by the decline in total employment. That resulted in a steady state unemployment rate of 6.2% in May and June.
What likely increased is the number of Colorado employers. According to state labor data, the number of employers paying into the state’s unemployment insurance system increased 4.1% to 194,097 in the fourth quarter last year, compared to the prior year.
Newer data won’t be out until August, but, Gedney said, “we are seeing some increases in the number of establishments.”
→ HIGHER PAY: Average wages are up by $1.23 an hour for private, nonfarm workers in Colorado, according to the BLS establishment survey. The average hourly wage is now $31.58, up from $30.35 last year.
State’s business Chambers agree but…
In reaching out to a handful of Chambers of Commerce for a story, many shared that their membership stayed steady last year and is now higher than before the pandemic. That includes chambers in Grand Junction, Gunnison, Kremmling, plus Good Business Colorado, Latino Chamber of Commerce in Boulder County and the Colorado Chamber of Commerce.
After the story was published, I heard from more, including Estes Park, which was in its first year of operation. They decided to focus on the community rather than recruiting members.
“It paid off,” Donna Carlson said in an email. “By the end of March 2021 we had doubled in membership. The pandemic gave us a great opportunity to show what chambers can do for a community.”
Pretty much all the chamber officials pointed to the issue of employers unable to find enough workers, especially for service-level jobs. Reasons were all over, but about half blamed federal unemployment benefits for giving the unemployed less incentive to return to jobs paying minimum wage or less than $20 per hour.
“Adventures in Whitewater was in (Tuesday). They’re one of our rafting companies and they’ve struggled all season to find guides and even people to come in and help them do reservations,” said Brittany VanderLinden, assistant director of the Kremmling Area Chamber of Commerce. “Collectively, everybody is (having labor shortages) because unfortunately, people can’t pay what unemployment is paying right now.”
The federal $300 bonus means an extra $7.50 an hour for a 40-hour week. It’s in addition to pandemic benefits available to those who normally don’t qualify for state benefits, including gig workers, the self-employed or folks who’ve exhausted regular state benefits. Federal aid can provide $325 to $936 each week.
There’s even greater concern for what happens after summer, when students go back to college.
“Restaurants will be in a bit of another hole where they’re trying to find people that will come and work to keep the restaurants open,” she said. “Right now, that’s where our businesses are struggling the most — finding people to work for them.”
→ Take the survey: Is there a labor shortage? ←
Less optimism for unemployed workers
The state Department of Labor had a press conference on Friday that, in part, reminded everyone that Sept. 4 is coming.
That’s the last day unemployed Coloradans are eligible for federal benefits — be it the gig worker’s Pandemic Unemployment Assistance, the extended benefits of Pandemic Emergency Unemployment Compensation or the $300 weekly bonus.
If the federal programs ended today, the 121,700 Coloradans who are currently collecting unemployment would lose some or all of their benefits. Of those, the 85,500 on PUA or PEUC would lose everything. The rest, or about 36,200 people, would just lose the extra $300 a week but be able to stay on regular state benefits until they use them up.
Whether most people still on unemployment are staying put because of the federal bonus won’t be known for months. A report by CNBC on states that ended federal benefits in June found that job search activity did not increase in 12 of those states, despite the loss of pandemic benefits.
Some readers of What’s Working want to work. It’s just that the process of finding a new job is long and tedious. One reader in our very own What’s Working survey shared: “It’s taken about 10 months of searching and applying and I finally found a job!”
The number of people on unemployment has continued to decline each week — it was down 13.23% in the week ended July 3, from the week prior.
But there are other things that are coming to an end, mainly a March 2020 executive order from Gov. Jared Polis that required the labor department to pay out unemployment benefits within 10 days, even if it took longer to process the claim. That order is now ending Aug. 7.
“These changes are forthcoming,” said Phil Spesshardt, director of the state’s Division of Unemployment Insurance.
And that whole process could take longer. Normal processing time in non-pandemic times generally takes four to six weeks, he added.
Just because you’ve successfully verified your identity through ID.me, the state’s chosen security tool, doesn’t mean you’re in the clear. Something else may be holding up your unemployment check.
Daniel Chase, CDLE’s chief of staff, said more than 8,000 accounts are in this holding state.
But more than half — or 4,310 accounts — are on hold because there are still signs of fraud. A good example is Denver resident Anthony Zaghab, who is accused of receiving more than $40,000 in unemployment insurance benefits “on behalf of ineligible family members without their knowledge,” according to the U.S. Attorney’s Office for the District of Colorado.
Those are unlikely to ever be lifted.
Another 3,790 are on hold due to some non-fraud reason. The holds may have been triggered because the person said they weren’t able or available to go back to work. That automatically creates a hold that must be investigated. To qualify for unemployment benefits, you must be able to work, though there are still some COVID-19 health issues that qualify for an exemption.
“Just because ID.me is passed does not mean that we will release every single claim,” Chase said. “We are still investigating them.”
- WHO ARE YOU AGAIN? The state will require multi-factor authentication, or MFA, for anyone on unemployment starting in “early August.” That means users logging into their unemployment accounts must use a password plus a special code that they will receive by email, phone or authentication app. MFA is commonly used to protect one’s personal accounts.
- IGNORE TEXTS: CDLE does not text people on unemployment, so if the labor or unemployment office is texting your phone, it’s a scammer trying to phish for your personal information. Phishing fraud continues so if you’re getting unemployment, check that your bank account information is correct before requesting your next payment.
- JUMPSTART INCENTIVE: As of July 16, the Colorado Jumpstart program has paid $5.2 million to 7,417 people who returned to work by June 26. More than 18,670 joined the program and as long as they started work by June 26, they stand to get a $1,200 to $1,600 bonus for eight weeks of work. The first payment is paid four weeks after one’s start, the second after eight weeks.
→ The federal eviction moratorium ends July 31. Read more: “What you need to know in Colorado as the federal freeze on evictions ends”
→ Join The Colorado Sun on Monday, July 19, for a free Q&A with one of Colorado’s U.S. Senators Sen. Michael Bennet as he discusses the Child Tax Credit that is available to families with children under 18. This virtual event starts at 5:30 p.m. Register for free at coloradosun.com/live.
Thanks to the hundreds of folks who took the What’s Working survey. We have a winner of the $100 gift card and she has been notified. I’ll explore more of the results in a future column but I’m always looking for good work, jobs and unemployment intelligence, so if you’ve got a concern about any of those or more, send it my way to email@example.com. Until next week, ~tamara
What’s Working is a Colorado Sun column for readers navigating today’s economy. Read the archive and don’t miss the next one. Get this free newsletter delivered to your inbox by signing up at coloradosun.com/getww
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