LMI Archives - Colorado-based Business and Economic Research

Colorado High Tech Job Growth Flat for Past Year

July 9, 2012July 9, 2012 horvath

Colorado’s high-tech cluster played an essential part in the growth of the state economy for the past 20 years, particularly between 1994 and 2001. At its peak in 2001, it employed more than 216,000 workers, or 9.67% of total employment.

Today that number is roughly 175,000, the same that it was when the recession officially ended in mid-2009. High-tech employment accounts for 7.67% of total workers.

The cluster, as defined by Colorado’s Labor Market Information agency, actually continued to decline after the recession. It bottomed out in March of 2010 at 169,300 workers. Over the next 15 months more than 6,000 jobs were added and 176,000 high-tech workers were employed in July 2012. Cluster employment has been relatively flat since then.

Colorado’s telecommunications sector continues to experience declines resulting from consolidations. As well, it has recently been announced that Abound Solar is going into bankruptcy, the addition of a proposed General Electric facility will be delayed and another GE facility will reduce its workforce. In addition the Aerospace and Clean Energy Park in Northern Colorado was scrapped. Unfortunately, the volatility associated with the fledgling renewable energy cluster comes as no surprise. Proposed defense cuts could play havoc with the state aerospace industry.

Current projections for Real GDP growth are less than 2.0% for the next year. Continued lackluster job growth in the high-tech sector is likely.

Colorado Unemployment Rate Tops the U.S.

March 13, 2011May 31, 2014 horvath

On March 10th, the Colorado Office of Labor Market Information (LMI) announced that the statewide seasonally adjusted unemployment rate reached 9.1% in January. By comparison, the national rate dropped to 9.0%. The last time Colorado’s rate was higher than the U.S. was September 2005.

These results are further indication that the state is lagging the nation in its recovery. Over the past year, the
national rate has declined, while the state rate has increased slightly.

A review of the 64 counties shows that 35 have a rate less than the state (9.9% non-seasonally adjusted). In
several counties with small labor forces there is unemployment of about 20%. In other words, both urban and rural counties have not been spared.

Colorado has 7 Metropolitan Statistical Areas (MSA) that cover 17 counties and account for 86% of the labor force. The unemployment rate (non seasonally adjusted) in 9 counties is less than the rate for the state.

A review of unemployment rates by MSA shows that the Denver-Aurora is the same as the state, whereas Boulder-Longmont and Fort Collins-Loveland fall below the state. The remaining four MSAs have rates (Greeley, Pueblo,Colorado Springs, and Grand Junction) above the state.

In addition, Colorado has seven Micropolitan Statistical Areas (MCAs) that cover 8 counties. About 5.5% of the
labor force works in these locales.

Five of the seven MCAs have unemployment lower than the state average (Durango, Edwards, Fort Morgan, Silverthorne, and Sterling). On the other hand, unemployment in Canon City and Montrose is well above the state average.Unemployment in 5 of the 8 counties is below 9.9%. In the remaining 39 rural counties, 21 had unemployment rates lower than 9.9%.

The aggregate rate of unemployment was greatest in the MSAs (9.94%), followed by the MCAs (9.70%), and the rural counties (9.58%). About one-third of the counties have unemployment below 8.0%.

On a more positive note, limited job creation began in the second quarter of 2010. If that growth continues, the state rate is likely to follow the national trend, and decline as the year progresses.

Has the Colorado Job Creation Machine Stalled?

March 3, 2011May 31, 2014 horvath

Most analyses of Bureau of Labor Statistics (BLS) employment data report net change in the number of workers. For example, Colorado lost about 25,000 jobs in 2010.

BLS also produces data series, based on the Quarterly Census of Employment (QCEW – private sector only), that report the following employment flows:
• employees added (establishments were opened); in 2009 this total was 101,869.
• workers added (firms currently in business); in 2009 this total was 369,773.
• employees lost (establishments contracted); in 2009 this total was 472,895.
• workers lost (firms closed); in 2009 this total was 111,574.
The sum of the first two categories measures gross job gains, whereas the sum of the latter two categories is gross job losses. In 2009 there was a gross gain of 471,642 jobs and a gross loss of 584,469 jobs.

The net change in employment is the difference between job gains and job losses. In 2009 the net change in employment was -112,827 workers. Total QCEW private employment for 2009 was 1,828,955 workers.

The magnitude of the net jobs lost is striking. It is a result of reduced job creation and increased job losses – the perfect storm on steroids. It should also be noted that in both 2008 and 2009 more jobs were lost by firms closings than were added by firms that were opened.

The following points stand out in an analysis of the jobs gained and jobs lost data:
• During the “go-go 90s” there was a high level of gross jobs lost and an even higher level of gross jobs added. There was a high level of job churn accompanied by strong net gains in employment.
• For the period 2002 through 2004, weak gross job gains were offset by much stronger gross job losses. There were net job losses of about 50,000 workers for this period.
• Gross job gains were comparatively weak for 2006 through 2008, although the state added about 170,000 net jobs over that period. There was a net increase in employment because of a decline in the number of gross jobs lost. In other words, job churn subsided. Workers were content to stay in the jobs they held at the time and fewer jobs were created, which increased competition for the available openings.
• It is especially disturbing to see the decline in the number of employees working for firms that were opened.
At this point, data for 2010 is available through mid-year. The good news is that there seems to be significant improvement in the number of gross jobs lost. On the downside, there is not corresponding improvement in the number of gross jobs gained.

For the moment it appears that Colorado’s wild-west entrepreneurial job creation machine seems to have stalled!

Hickenlooper Proposes Closure of Fort Lyon Correctional Facility

February 22, 2011May 31, 2014 horvath

Governor Hickenlooper recently proposed closing the Fort Lyon Correctional Facility as part of cost cutting measures to bring the state budget into balance. The facility employs roughly 200 workers.

For those in the metro area companies come and go and the loss of a company with 200 employees often goes unnoticed, unless a person works there. Approximately 1.2 million people work in the Denver-Aurora-Broomfield MSA, so a loss of 200 jobs would be 0.02% of total employment- not even a bleep on the radar. Bent County residents obviously have a different perspective.

A short lesson about the county will provide insight into their point of view. Bent County is located in Southeast Colorado east of Pueblo, between Otero and Prowers County. Approximately 6,500 people call the county home. Between 2000 and 2009, Bent County population actually increased by about 650 people, or an annualized rate of 1.2%. While this is less than the rate of growth for the state, at least it is positive. Not all rural counties in Colorado have seen their population expand over the past decade.

A review of Census data (Quickfacts) shows that there are about 2,000 households in the county and 2,400 housing units. There is a higher concentration of minorities (Black, American Indian, and Hispanic – terms used by the Census Bureau ).

About 65% of the population (which include prison inmates) are male. As is the case with many other rural counties, Bent has a lower concentration of people under the age of 18 and a higher percentage of workers over the age of 65.

In 2008, median household income for the county was about $33,000 compared to $57,000 for the state. As might be expected from these income levels, approximately 29% of the population lives below poverty level.

With that background let’s look again at the importance of the correctional facility. Fort Lyon is Bent County’s second-largest employer. (Note: Many Colorado rural counties are the home to correctional facilities).

Data from the Colorado Office of Labor Market Information (QCEW) reported that in 2009, Bent County has 1,303 covered workers (workers on payrolls who paid unemployment insurance) in 88 establishments. Only 560 are private sector employees.

At that time the top employment sectors were as follows: local government (451), state government (234), retail (68), hotels and restaurants (65), federal government (58), health care and social assistance (49), and finance and insurance (45). In December, 2009 the county unemployment rate was 8.7% (LMI). The loss of 200 employees in this economy would be devastating!

Should Governor Hickenlooper rescind his recommendation to eliminate the Fort Lyon facility? If so, what other programs can be cut or eliminated to keep the facility in operations? There is no right answer and there is no winner in this situation.

It’s a tough time to be a governor!

It all Starts with a Job

November 28, 2010May 31, 2014 horvath

A mantra common to economic developers, high school counselors, and politicians is that “it all starts with a job”. Jobs come in all shapes, sizes, and pay rates, as evidenced by the employment and occupation data produced by Colorado Office of Labor Market Information (LMI).

For example, the average entry level pay rate for Coloradans is $9.98 per hour while the average rate for experienced workers is $28.18. On average, hourly wage earners receive $22.11 per hour.

On the salary side of the equation, average annual entry level wages are $20,767 with experienced workers receiving $58,606. Average wages across all sectors are $45,993 per year.

The most recognized LMI data is the employment and unemployment numbers. In addition; the group also tracks occupational data, such as types of jobs, short-term and long-term growth rate, areas of the state where jobs are most prevalent, and compensation information.

A simple example of some of the data can be found by looking at the seven categories of occupations in the legal profession. There are approximately:

• 14,298 Lawyers
• 4,486 Paralegals and Legal Assistants
• 4,006 Compliance Officers, Except Agriculture, Construct
• 3,965 Claims Adjusters, Examiners, and Investigators
• 1,782 Detectives and Criminal Investigators
• 627 Judges, Magistrate Judges, and Magistrates
• 298 Law Clerks

A similar breakdown is available for each of the key industries that comprise the Colorado economy. These data can be used by community colleges, workforce centers, and private educators to establish training and education programs. Parents and guidance counselors may use them as a tool for guiding their children into certain occupations. Employers may evaluate the data to understand pay ranges or areas where they may expect labor shortages.