By: Ernest Gurulé
With the first month of a new year very nearly over, Colorado, like the rest of the nation, continues to adjust to life in the times of COVID. The virus, a scourge that few imagined could ever land on us, landed on us and in a way few ever could have imagined.
Early reports of a heretofore unknown virus began surfacing in China in late 2019. Since then, it has ravaged the world, killing more than five million people, includ- ing nearly 900,000 in the U.S. But beyond casting this deadly shadow on the lives of men, women and children, it has also threatened entire economies. In his January 13th State of the State speech to the Colorado General Assembly, Governor Jared Polis acknowledged COVID’s economic impact.
“Inflation is accelerating during the pandemic,” he said. “Supply chains globally have been disrupted, spending hab- its have changed, the cost of housing has spiked.” No one, urban or rural, he said, has escaped the impact of the virus. “Farmers and ranchers face unprecedented challenges and many Coloradans have left the workforce.”
While Colorado’s job numbers have been impacted by the pandemic, the state has fared far better than many of its neighbors. In December, Colorado’s unemployment dropped below five percent, the lowest it has been since March 2020. The end of year 4.8 percent unemployment rate is a far cry from April 2020 when COVID was washing over the country. That month, Colorado’s jobless numbers catapulted to a nightmarish 12.1 percent.
According to the Colorado Department of Labor and Employment, an estimated 9,000 people joined the workforce between September and December. The number of unemployed Coloradans also declined by nearly 10,000 to 154,300.
Unemployment rates across Colorado showed the state with some regions sitting atop sharp jagged edges and others, mostly along the Front Range, in the softer landing zones. Adams County registered the highest unemployment in the metro area at 4.9 percent. Douglas County registered the lowest at 3.1 percent. El Paso County came in at 4.3 percent and its neighbor to the south, Pueblo County, 6.4 percent, the highest in the state. Still, despite its dubious standing in the category, Pueblo’s rate of unemployment has dropped steadily from last January’s 9.3 percent.
Still, said Kate Watkins, Chief Economist of Colorado’s Legislative Council, despite COVID, Colorado is showing as much resilience as any state. “When the pandemic reces- sion set in in March and April 2020, state revenue forecast- ers across the U.S. feared that state and local government revenue would fall precipitously,” she said. The forecast caused a number of states, including Colorado, to cut bud- gets as a preemptory hedge. But, added Watkins, federal stimulus money eased the pain. That, along with “consumer and businesses activity kept state revenues afloat across most states.”
While Colorado’s economy continues to regain steam, casting a foreboding shadow on the state and nation is inflation which hit a forty year high at year’s end. The seven percent inflation mark recorded at the end of 2021 was the highest since 1982 when it topped out at 6.8 percent.
Coloradans paid more for gasoline, food, medical care services, new and used vehicles and more. Still, economists are heartened by the fact that inflation rose at a slightly slower pace in December, 0.4 percent, from November’s 0.8 percent. Much of the blame for the trend can be traced to adverse weather, shortages due to supply chain interrup- tions and a shortage of computer chips, a component vital in everything from home computers and appliances to new cars and trucks.
A real time reminder of the impact of far too few computer chips is visible at car dealerships across the metro area where new cars are scarce, back ordered or, otherwise, nowhere to be seen. At the same time, pre-owned cars and trucks are skyrocketing in value. In December used vehicles rose in price by an average of 3.5 percent, which translated into an annual jump of 37 percent.
In many ways, Coloradans have adapted to life with COVID, whose newest variant, Omicron, is mounting the latest challenge and impacting normalcy on a variety of fronts. “The pandemic has had a (sic) immense impact on labor markets, causing many to rethink employment, resulting in elevated levels of job switching, reductions in the number or jobs and hours worked, and many potential workers retiring or staying retired,” said Watkins. Additionally, she added, “many are unable to work due to child or other dependent care needs.” It all adds up to what Watkins calls “multifac- eted trends (that) have resulted in labor shortages across many industries, including the services industries most impacted by the pandemic.”
Still, while Colorado has fared far better than other states and workers have adjusted to labor’s new supply-and- demand job dynamics, it may still be a while before a return to the halcyon days of booming economies, low inflation and well staffed workforces. On the other hand, we may already be witnessing a new economic normal in the workforce where ‘We’re Hiring,’ and ‘Help Wanted’ signs proliferate in storefronts, job sites and across the internet. The key variable in this equation may all hinge on COVID, its new variants or in how competing forces react to it.
