Colorado may have recovered the 375,000 jobs lost in the first two months of the pandemic, but we’re not back to peak employment yet. And while new business creations remained high so far this year, delinquencies and dissolutions are growing.
These and other trends were made clearer after the Secretary of State’s quarterly Business & Economic Indicators report released this week. But what to make of it? Brain Lewandowski, an economist who analyzes the data for the state, calls Colorado’s outlook “muddled.”
“I’ve been in this job, starting my 16th year now, and there’s always metrics that are moving in different directions and that’s what is a little bit frustrating. We can glom on to any single economic metric and say that the economy is improving or it’s not,” said Lewandowski, executive director of the Business Research Division at the Leeds School of Business at University of Colorado Boulder. “And that’s why I say it’s muddled right now. But that’s not something new because of the pandemic.”
While the state has recovered all the jobs lost during March and April 2020, recovery was uneven depending on the industry or community. Five of the 11 major industries — government, mining and logging, information, arts and entertainment and private health care jobs — were still below peak job levels as of March. The Greeley metro area, which suffered as the oil and gas industry declined in the pandemic, had only recovered 55% of jobs lost, as of February. Outside the state’s main metro areas, the rest of the counties also haven’t recovered 100% of jobs lost.
“Recovery isn’t shared equally by some of those industries that we looked at,” Lewandowski said. “Like, professional and business services, which is a high-skill, high-paying industry that includes engineering, R&D, architecture, accounting and so on. That industry is well above pre-recession (levels).”
While the state’s main metro regions have recovered, that doesn’t mean the urban areas have hired all the workers they need. Just this week, local cities and public and private agencies announced continued labor shortages:
- Arapahoe County Public Works said shortages are affecting 30% of its workforce, which means no regular street sweeping in unincorporated Arapahoe County this Spring. >> NOTICE
- Boulder Parks and Recreation plans to reduce certain services due to staffing shortages. For example, it won’t pull weeds as often and will reduce the number of outdoor pool swimming lessons, the Boulder Daily Camera reports. >> STORY
- Fort Collins public transit service Transfort is still trying to fill open positions so it can restore bus routes that have been suspended for more than six months, The Coloradoan reports. Some drivers also saw wage increases of a couple of dollars to $22.50 an hour. >> STORY
There’s also additional pressure right now because of rising inflation, Russia’s war on Ukraine and continued impact on the supply chain.
Secretary of State Jena Griswold said her concern is for families and small business owners who are dealing with inflation and the labor shortage. Consumer prices rose 9.1% in the Denver area in March from a year ago, making it the highest in four decades and higher than the U.S. overall.
While the higher prices were blamed on transportation (higher gas prices) and housing (home prices in the state increased from 18.2% in the fourth quarter from a year ago), food costs were also up 14.3%. But exclude food and energy costs, and state economists put Colorado’s March inflation rate at 8%.
“These are challenging times for working families making tough choices between filling up the tank, paying bills and putting food on the table. In Colorado business owners must contend with the rising cost of operating expenses,” Griswold said.
“Remember, we have over 800,000 businesses registered in the state of Colorado, the vast majority of them are small. They include people who are teachers and teach yoga on the side. They include a lot of folks who have to supplement their income because just getting by is harder every single day,” she said. “We’ll continue to monitor those numbers, but what I can say is my job as Secretary of State is to support small businesses in any way that we can.”
Other takeaways from the Quarterly Business & Economic Indicators report:
- Inflation increased to 9.1% in the Denver-metro area in March 2022, which was higher than the nation’s 8.5% and largely due to higher housing and energy costs (gas prices were up 32.9% in April in Colorado). But excluding energy and food, the core inflation for Colorado rose 8%, which is still higher than the national price growth of 6.5%.
- First-quarter business creation filings slowed 2.1% from a year ago, but was up 22.9% from the fourth quarter. First quarters tend to be higher than the end of the year as people get back to work after the holidays and make new resolutions.
- While 20.4% more business owners dissolved their business in the first quarter compared to a year ago, that’s attributed to more businesses overall. Also, owners that received Paycheck Protection Plan loans were able to prop up their operations in the worst part of the pandemic only to close this year.
- The number of businesses in good standing in Colorado rose 6.1% from the year-ago first quarter to 862,128 entities.
- A poll of business leaders about the second quarter 2022 showed that their confidence was in decline
Pending Colorado business laws
Besides a filing fee reduction proposal, Secretary Griswold put her support behind another bill that exclusively impacts Colorado businesses.
And after seeing a spike in business identity theft, she supported Senate Bill 34 (read it here) to allow her department to work with the Attorney General’s Office to investigate fraudulent business filings and mark them in the business registry to prevent further abuse. Her office didn’t have the authority before.
“One of the things I heard from small business owners (was) if they’re ever in this unfortunate situation where their business identity has been stolen, it can be very costly. A small business may have to pay hundreds of thousands of dollars to go through litigation to recoup their identity,” she said.
The bill passed the legislature this week and awaits the governor’s signature.
The $600 million unemployment trust fund bill
The highly anticipated Senate Bill 234, introduced Wednesday, would take $600 million from the American Rescue Plan Act and pay off some of the state’s $1 billion loan for its unemployment trust fund.
There will still be loan balance and employers face insolvency fees since the trust fund is empty. But the bipartisan bill takes all that into account by extending the hold on solvency surcharges through the end of 2023 and while also proposing changes to the unemployment benefits process. Those include:
- Eliminate the one-week waiting period before benefits start. This would go into effect after the trust fund reaches a balance of at least $1 billion.
- Provide partial benefits to those who take on part-time work with no decline in jobless pay until 50% or more of the weekly benefit amount is earned. The reduction currently starts at 25%.
- Require a study to determine how to implement a system that pays working parents additional unemployment pay per dependent.
- As part of the proposed Benefit Recovery Fund, unemployment benefits would be provided to all individuals, regardless of immigration status, who lost their job at no fault of their own.
- Waive repayment of benefits made in error by the Department of Labor if the repayment is inequitable. Inequity could include someone on public assistance, or whose income is four times below the federal poverty level or other circumstances.
- Require employers to notify workers of unemployment benefits
The bill is sponsored by Sen. Chris Hansen, a Denver Democrat and Sen. Bob Rankin, a Carbondale Republican. It also has the support of the Colorado Chamber of Commerce.
In a statement, Chamber president Loren Furman said, “After months of negotiations, this bill is an important first step in providing real relief to Colorado businesses. While we are still in need of a long-term solution, these funds will prevent significant unemployment premium increases, which will in turn help Colorado workers and local communities across the state.”
→ READ: Colorado lawmakers plan to overhaul unemployment system, extend benefits to immigrants as they also backfill depleted fund
3 Colorado cities rank in top places to start a business
Two years into the pandemic, Denver and Colorado Springs continue to rank among WalletHub’s top 10 cities to start a business, landing at 6th and 9th respectively. And not too far behind in 12th place: Aurora.
WalletHub judged 100 large cities nationwide on business environment, access to resources and business costs. And of those, the company gave points for startups per capita, five-year business survival rates, job growth, venture investment and labor costs. There was a maximum score of 100 points.
The top city — Orlando, Florida — scored 62.76 points largely for its business environment. Here’s how the locals did:
- 6th: Denver scored 59.05 and fared better for its business environment but fell into the bottom half for business costs.
- 9th: Colorado Springs received 58.08 points, and was in the top third for all three main categories. The city also got a plug for “cheapest expensive office spaces” at number two.
- 12th: Aurora scored 56.31, mostly for its business environment but it got dinged in access to resources and landed at 82nd overall.
WalletHub also did one for best and worst small cities to start a business. Colorado showed up as well. But it’s a big list so here are the local cities that landed in the top 100:
- 26th: Englewood
- 33rd: Grand Junction
- 40th: Longmont
- 58th: Windsor
- 65th: Loveland
- 74th: Lafayette
- 82nd: Fountain
Need a job? Upcoming job fairs
Two job fairs of note: One for veterans and the other for military spouses are scheduled for next week. According to organizers with RecruitMilitary, veterans have some of the lowest unemployment rates, at 2.4% as of March (Colorado’s overall rate was 3.7%).
Not so low? The unemployment rate for military spouses, said Shelby West, with RecruitMilitary.
“For years, military spouses have represented the highest rate of unemployment among Americans at a steady average of 24%. That figure is projected to significantly rise to a post-pandemic proportion of 35% by year end. The spouses’ counterparts, America’s veterans and service members, represent the lowest unemployment rate of Americans at just 2.4%. The disparity between the two military-affiliated groups is alarming.”
- Denver Veterans Job Fair is in person at Empower Field at Mile High from 11 a.m. to 3 p.m. on Thursday, May 5th. >> DETAILS
- On the same day, the Military Spouse Virtual Career Fair is online but also from 11 a.m. to 3 p.m. >> JOBS
→ Empowering Coloradans Day career fair: The Colorado Department of Human Services has 170 open positions and it’s hoping to fill them with a virtual and in-person career fair on May 4. This is in partnership with the state’s workforce centers so wherever you are in Colorado, there’s usually a center nearby. The event is from 10 a.m. to 2 p.m., with the first 30 minutes reserved for veterans. Event locations are listed below. >> REGISTER
→ ATTN high schoolers: Generation Schools Network is hosting a job fair for Denver-area high school students on Tuesday, May 3, from 9 a.m. to 1 p.m. at Hope Online Academy, located at 4801 MLK Blvd in Denver. A few of the two dozen employers expected include UPS, Aurora Community College and Advanced Manufacturing Science Institutes. >> MORE INFO
More working bits
→ Denver restaurant workers saw a 7.9% increase in wages to $16.56 an hour, according to BentoBox, a company that markets its services to restaurants. That ranked the city’s pay for restaurant workers at 11th nationwide. Chefs in Denver received the highest average wage, at $25.37, while dishwashers the lowest, at $13.72. That likely includes workers outside of the city of Denver since Denver’s minimum wage is $15.87 an hour. >> REPORT
→ College graduates and unions — If you’ve been wondering what’s behind the rise of union membership (besides a push for livable wages), here’s another take: It’s college grads. This type of educated worker may feel the “economic grand bargain available to their parents … has broken down. And they see unionizing as a way to resurrect it,” reports The New York Times. The Times also notes that college grads have increased their support of unions to 70% in recent years, from 55% in the late 1990s. >> STORY