Skip to contents
Economy

Colorado had the nation’s highest rate of layoffs and job separations in August

Though many employers blamed a labor shortage for lack of workers, the state’s rank in job cuts, quitters and hiring rates was among the highest in the nation, says a new JOLTS report.

  • Credibility:

As the summer wound down and large numbers of Coloradans on pandemic unemployment applied for new jobs, another group of workers lost theirs — at the highest rates nationwide. 

New federal labor data showing how states fared put Colorado at the top of the list of states with the highest rates of layoffs and job separations for August. That includes people who quit their jobs, were fired, ended their seasonal gig, retired, transferred to other locations or died.

The Job Openings and Labor Turnover Survey, a two-decades old monthly report on regional and national data trends from the U.S. Bureau of Labor Statistics, began carving out individual state data for the first time this month. It tracks how many people lost their jobs or were hired compared to all nonfarm workers.

Few local businesses are not actively seeking employees along Main Street in Breckenridge on Saturday, October 16, 2021. (Hugh Carey, The Colorado Sun)

But it’s a bit of a head scratcher as to why Colorado ranked so high for layoffs and job cuts in August, a time when companies faced staffing shortages that had some employers raising wages or turning away customers, while customers complained about poor service or long lines for emissions testing. The number of people making first-time unemployment claims had also been dropping.

“Initial claims are often a proxy for layoffs and those have been falling for a while,” said Ryan Gedney, a senior economist at the state Department of Labor and Employment. The number of Coloradans on regular state unemployment declined most of the summer, reaching a new pandemic low of 24,612 Coloradans as of Oct. 9.

The JOLTS report put Colorado in the top spot for layoff rate, at 2.7%, which is when employers cut workers and it’s not the workers fault but the employer has no plans to rehire them. Add in people who quit, or jobs that were eliminated and firings for cause, and that total separation rate was 6.3%, as seen in the interactive chart below where you can compare the data by month or category. The state with the second highest separation rate was Alaska, at 5.9%.

Colorado also tied for ninth highest rate of people quitting their jobs in August, at 3.4% (the nation’s average was 2.9%). 

On the other hand, Colorado also ranks in the top half of states with the most job openings and hiring activity, though local hiring rates have slowed since June. Strong hiring rates mean workers have more options and may be quitting and switching jobs frequently, said Chris Brown, vice president of policy and research at the Common Sense Institute, an economic research organization established to promote Colorado’s economy. 

“People are intentionally moving jobs because they’re seeking a different role, better pay. I would usually interpret that as very positive,” Brown said. “But what I think is most interesting is that while there’s a lot of churn and activity in the labor market, the overall job growth levels at least over the last two months are slowing.”

TODAY’S UNDERWRITER

Colorado has been adding jobs lost during the early part of the pandemic — an estimated 375,000 fell off payrolls in the spring of 2020 — but the number of new jobs added per month dropped to 5,100 in September, down from a monthly average of 12,000 from February to July. 

“To fully recover, after adjusting for population growth, the new estimates push back (Colorado’s) full recovery well into 2022,” Brown said.

But even though layoffs and separation rates were high in August, they weren’t records, Gedney said. In April 2020, at the start of the pandemic, the rate of layoffs jumped to 9.9%, while all separations hit 12%, according to experimental state data released by the BLS earlier this year. And in July 2007, just before the Great Recession, Colorado’s quit rate reached 3.9%.

In other words, Gedney said, the labor market is still tight in Colorado, but there’s a lot more movement than before.

“It’s maybe even a little bit better than where we were going into the pandemic. There’s still room to give,” he said.

High quit rates, layoffs and job cuts explained

Explanations abound as to why Colorado is seeing high job loss rates even as pandemic benefits were available in August and employers struggled to fill positions. 

In August, some seasonal workers were leaving their summer gigs because it was the end of the season or time to return to school. 

Some companies did announce job cuts that went into effect by August. United Airlines laid off 454 workers in Colorado after outsourcing its catering service to Gate Gourmet, which agreed to hire the airline’s workers in good standing.  T. Rowe Price, which cut 282 workers in Colorado Springs, also outsourced the work to a contractor.

But typically, when people quit their jobs in high numbers it’s because of the availability of other jobs. And August data put Colorado in a five-way tie for 17th most hires and four-way tie for 14th most job openings. 

MORE: Where have Colorado’s workers gone? Some say: “We’re still here. Hire us!”

Andrew S. a tech worker who shared his labor story with What’s Working, quit his new job after two weeks after being asked to work at the office two days a week. Another business offered him a pay raise and would let him continue working remotely. 

“I felt bad because they were counting on me, but I had to do what was right for me in the long term,” he said.

COVID-19 cases also climbed during the month and by late August, the number of people hospitalized with confirmed cases was at the highest level since January. The current number is now more than 60% higher than in August. Amplified health concerns may have caused folks to drop out of the workforce. 

But the state Department of Labor and Employment said vaccine mandates weren’t to blame.  Many mandates didn’t go into effect until September or later.

“There is no indication that vaccine mandates were the major driver for quits in August nor does CDLE have any available data to support that conclusion,” Phil Spesshardt, the labor department’s director of the Division of Unemployment Insurance, said in an email. “Deadlines for even the earliest mandates in Colorado were in September, and it is more likely that the overall tightness of the labor market, which is allowing employees to pit employers against each other for higher pay and/or benefits, was responsible for increased quits in August.”

TODAY’S UNDERWRITER

People who quit their job because they don’t want to get a COVID vaccine may file for unemployment, “but that does not mean they will be approved to receive benefits,” Spesshardt added. Claims are decided on a case-by-case basis. 

Colorado’s vaccine mandate for state workers (or else opt for twice-weekly testing) was Sept. 20. The mandate for health care workers in state-approved facilities wasn’t approved until Aug. 31 and requires full vaccination by Oct. 31.

President Joe Biden’s vaccine mandate for private companies with 100 or more employees is not yet in effect as business groups push to delay it. A handful of private companies that adopted vaccine policies before the end of August only required them if the worker chose to go to the office, or set a deadline in September or later, according to a report by NBC News.

Other separations

Joe Bradshaw, operational manager at TenderCare assisted living facilities in Denver, has struggled to find caregivers throughout the pandemic. He said it’s difficult to raise wages above $15 and change an hour for caregivers, since his facilities are open to Medicaid recipients.

For his dedicated staff that has stuck with him, he tries to provide additional training and has asked the governor to consider subsidies to help employers like him provide benefits, such as child care.

He said he can understand why layoffs may be high even as employers like himself struggle to find workers. His pickings are slim because $15-an-hour jobs aren’t attracting quality applicants anymore. He needs people who are, at minimum, professional. He offers a $100 bonus for new hires who show up on time for the first two weeks. He hasn’t paid one out in two years.

“Almost everybody I (interviewed) says they were laid off in their last job,” Bradshaw said. “I think the part of the system that’s broken is we can’t honestly give constructive feedback to the next employer. When an employer calls me and they say, ‘Well, why did Joe leave?’ All I can say is he hirable or not hireable. I can’t really say anything else.”

What also happened, though in smaller numbers, is that people left jobs for reasons other than getting fired or quitting. 

The JOLTS data reports “separations” as people who were laid off or fired, quit or fell into this assorted category that includes “retirements; transfers to other locations; deaths; or separations due to employee disability.” In August, that was about 6,000 workers in Colorado.

As for people who died, the state’s health department recorded 195 deaths due to COVID-19. It’s not known how many of those people were working or were part of the state’s workforce in August. But overall, of the 8,426 deaths in Colorado due to COVID as of Oct. 23, about 41%, or 3,433, were working age adults between 25 and 64. Of those, 57% were 55 years or older. 

TODAY’S UNDERWRITER

But there are also limits to official surveys like the JOLTS report, which relies on feedback from 16,000 U.S. businesses. Colorado’s sample could be just 300 to 400 businesses, Gedney estimated. It also includes a mix of data collected mid-month and for the whole month. 

“I wouldn’t read too much into one month’s trend. From a (unemployment) perspective, I’m seeing the opposite,” said Gedney, sharing his own graph of JOLTS ups and downs on Colorado layoffs, which looked like a seismograph in the middle of an earthquake. “And it really is a very noisy series right now in terms of layoffs and discharges.”

Ryan Gedney, a senior economist at the Colorado Department of Labor and Employment said the new Job Openings and Labor Turnover Survey (or JOLTS), which tracks hiring, firing, quitters and job openings nationwide, “is incredibly noisy” for Colorado and is always up for revision. “This is best illustrated by the fact that while Colorado’s ranked #1 for highest layoff and discharge rate in August 2021, the state also ranked at the very bottom (50th) in April 2021,” he said in an email.(Provided by Colorado Department of Labor and Employment)

We believe vital information needs to be seen by the people impacted, whether it’s a public health crisis, investigative reporting or keeping lawmakers accountable. This reporting depends on support from readers like you.