CO recession
Colorado Recovery Watch April 20, 2011 In March, a majority of states — including Colorado — recorded unemployment rate decreases and posted job gains. While Colorado’s unemployment rate improved only slightly, the state boasted a healthy increase in its labor force, indicating a stronger rebound than the unemployment rate would suggest. Still, as the economy turns around, Coloradans continue to feel the pain of recession. Enrollment growth in food and medical assistance programs continues unabated. Unemployment In March, the Colorado unemployment rate eased off its all-time high of 9.3 percent, dropping to 9.2 percent. (Figure 1) That was not enough to shake Colorado’s recent and unusual trend above the national unemployment rate. Colorado had posted lower unemployment rates than the nation for six years. (Figure 1) Colorado’s unemployment rate now ranks 17th worst among states, and its increase in unemployment rate since the beginning of the downturn (December 2007) ranks 7th largest.1 High unemployment is likely to be a fixture of the state economy for some time. Colorado’s unemployment rate is forecasted at 8.8 percent for 2011, 8.5 percent for 2012, and 7.7 percent for 2013.2 Figure 1
Colorado stays above nation in unemployment rate Unemployment rate (seasonally adjusted)
12%
10% 9.2% 8.8% 8%
6%
4%
United States
2%
Colorado 0% 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through March 2011)
Page 1 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Current unemployment compared to past recessions The 2007-09 recession left unusually high unemployment in its wake. In past recessions, unemployment in Colorado returned to the norm of about 6 percent after two years. (Figure 2) Yet today, Colorado continues to experience very high unemployment more three years on. (Figure 2) Figure 2
Colorado unemployment rate elevated longer than in past recessions Unemployment rate (seasonally adjusted)
10% 9% 8% 7% 6% 5% 4% 3%
2007 Recession 2001 Recession 1990 Recession 1981 Recession
2% 1% 0% -3
0
3
6
9 12 15 18 21 24 Months from start of recession
27
30
33
36
39
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey (Data through March 2011)
Page 2 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Unemployment rate and the labor force The unemployment rate is connected to the size of the labor force. Workers are counted as unemployed only if they are looking for work, or are “in the labor force.” In times of recovery, the unemployment rate often spikes as laid-off workers who had given up on finding work resume the job hunt. Judging from recent data, Colorado is experiencing just such a spike. (Figure 3) So while Colorado’s unemployment rate is striking, coupled with the recent increases in Colorado’s labor force, high unemployment rate is actually a sign of recovery. That trend, along with improved unemployment insurance claims, increased personal incomes, increase production and other indicators suggests Colorado is recovering despite its high unemployment rate.3 Figure 3
Colorado unemployment rate and labor force (seasonally adjusted) 10%
2,800
9% 2,750 7% 6% 5%
2,700
4%
Labor force
Unemployment rate
8%
3% 2,650 2% 1% 0%
2,600 2007
2008
2009
2010
2011 Labor force Unemployment rate 4
Source: U.S. Bureau of Labor Statistics (data through March 2011)
Page 3 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Employment Recessionary employment losses in Colorado have been dramatic. (Figure 4) In March, Colorado was down 122,200 jobs, or 5 percent of its nonfarm labor force since the onset of the downturn in December 2007. That loss ranks 24th worst in the country.5 Recently, Colorado has shown signs of recovery in employment. The state is up 10,800 jobs from six months ago and has posted modest but steady employment gains in the past quarter. Those are encouraging developments given the state’s job performance the last three years. Still, Colorado will have to do better to bring prosperity back. Figure 4
Colorado employment rebounds slowly
Total nonfarm employment (seasonally adjusted, thouands)
2,400 2,350 2,300 2,250
2007 - 2009 Recession
2,227.7
2,200 2,150 2,100 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through March 2011)
Job shortfall Job shortfall measures the difference between actual employment and what employment would have been if jobs had continued apace with working-age population growth instead of plummeting during the downturn — in short, how far the state has been “set back” by the recession in jobs. Tracking from the onset of the recession in December 2007, Colorado’s job shortfall stands at roughly a quarter-million jobs. (Figure 5) Figure 5
COLORADO JOB SHORTFALL SINCE ONSET OF DOWNTURN (December 2007 to March 2011) Working-age population growth
5.6%lank
Employment this month
2,228,200lank
Employment level needed (the total number of jobs in the state if job growth had kept pace with working age population growth)
2,482,994lank
Job shortfall
254,794 ank
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
Page 4 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Medicaid and CHP+ Since the downturn, Colorado has seen consistent and substantial caseload growth in Medicaid and Child Health Plan Plus (CHP+). Those programs provide medical care for low-income residents and children, respectively. Medicaid and CHP+ programs served 649,000 Coloradans in March. (Figure 6) In the current fiscal year, combined Medicaid and CHP+ caseload is growing seven times as fast as the state population, adding an average of 5,700 enrollees each month.6 That growth illustrates the vulnerability of many Coloradans during the tentative recovery. Figure 6
Spurred by recession, Colorado public health insurance enrollment increases steadily
Medicaid and CHP+ enrollment
700,000 650,000
648,630
600,000 550,000 500,000 450,000
2007 - 2009 Recession
400,000 2007
2008
2009
2010
2011
Source: Department of Health Care Policy and Financing data (through March 2011)
Page 5 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Food assistance The recession touched off a substantial need for the food assistance provided by the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. As with the state’s public health insurance programs, that need continued to grow a year and a half after the official end of the Great Recession. (Figure 7) According to the most recent count in January 2011, 443,242 Coloradans receive food stamps. (Figure 7) That is 48,000 more people than a year earlier. Overall, SNAP enrollment has increased 79 percent, or 195,000 individuals since the beginning of the 2007-09 recession.7 Such tremendous growth in need demonstrates the force of the past recession. Figure 7
Colorado food stamp enrollment continues to grow after recession 500,000
Number of individuals
450,000
443,242
400,000
350,000
300,000
250,000 2007 - 2009 Recession 200,000 2007
2008
2009
2010
2011
Source: Analysis of U.S. Department of Agriculture SNAP program data (through January 2011)
Eligible but not enrolled Food stamp enrollment does not fully reflect hunger in Colorado. According to a recent study by the U.S. Department of Agriculture (the federal agency that oversees SNAP) only 52 percent of Coloradans eligible for SNAP are enrolled. That ranks 48th in the county among states.8 Colorado’s poor performance is driven largely by problems administering food assistance. Eligible clients are required to complete a 26-page application, show multiple forms of identification and lawful residence documents, and verify income every three to six months. Furthermore, the Colorado Benefits Management System (CBMS) database, which is used to administer SNAP and other Colorado assistance programs, is plagued with problems. Since its introduction in 2004, CBMS has consistently failed to deliver timely application processing, and has exhibited unreliable performance. Colorado needs to improve CBMS and its administration of assistance programs to ensure eligible families get help in this time of unprecedented need.
Page 6 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Headed back down? The unemployment rate is a “lagging indicator,” meaning it changes after the economy as a whole does. In March, Colorado’s unemployment rate backed off from its all-time high, amidst job growth, labor force expansion and other positive signs of recovery. For now Colorado can only hope those are signs a strong recovery is under way. The continuing rise in demand for safety net services shows that recovery has a long way to go. Contact: Alec Harris Policy analyst [email protected] 303-573-5669, ext. 316
1
Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Mar. 18, 2011. 3 See Colorado Legislative Council Staff and Draper, Heather, “Jobless rate not the whole picture,” Denver Business Journal, April 15-21, 2011. 4 Also, Colorado Legislative Council Staff for the chart design. 5 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 6 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing . 7 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “December 2010 SNAP/Food /Stamp Participation Data,” Food Research and Action Center. 8 “State Supplemental Nutrition Assistance Program Participation Rates in 2008,” U.S. Department of Agriculture: Food and Nutrition Service, January 2011. 2
Page 7 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Colorado stays above nation in unemployment rate Unemployment rate (seasonally adjusted)
12%
10% 9.2% 8.8% 8%
6%
4%
United States
2%
Colorado 0% 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through March 2011)
Page 1 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Current unemployment compared to past recessions The 2007-09 recession left unusually high unemployment in its wake. In past recessions, unemployment in Colorado returned to the norm of about 6 percent after two years. (Figure 2) Yet today, Colorado continues to experience very high unemployment more three years on. (Figure 2) Figure 2
Colorado unemployment rate elevated longer than in past recessions Unemployment rate (seasonally adjusted)
10% 9% 8% 7% 6% 5% 4% 3%
2007 Recession 2001 Recession 1990 Recession 1981 Recession
2% 1% 0% -3
0
3
6
9 12 15 18 21 24 Months from start of recession
27
30
33
36
39
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey (Data through March 2011)
Page 2 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Unemployment rate and the labor force The unemployment rate is connected to the size of the labor force. Workers are counted as unemployed only if they are looking for work, or are “in the labor force.” In times of recovery, the unemployment rate often spikes as laid-off workers who had given up on finding work resume the job hunt. Judging from recent data, Colorado is experiencing just such a spike. (Figure 3) So while Colorado’s unemployment rate is striking, coupled with the recent increases in Colorado’s labor force, high unemployment rate is actually a sign of recovery. That trend, along with improved unemployment insurance claims, increased personal incomes, increase production and other indicators suggests Colorado is recovering despite its high unemployment rate.3 Figure 3
Colorado unemployment rate and labor force (seasonally adjusted) 10%
2,800
9% 2,750 7% 6% 5%
2,700
4%
Labor force
Unemployment rate
8%
3% 2,650 2% 1% 0%
2,600 2007
2008
2009
2010
2011 Labor force Unemployment rate 4
Source: U.S. Bureau of Labor Statistics (data through March 2011)
Page 3 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Employment Recessionary employment losses in Colorado have been dramatic. (Figure 4) In March, Colorado was down 122,200 jobs, or 5 percent of its nonfarm labor force since the onset of the downturn in December 2007. That loss ranks 24th worst in the country.5 Recently, Colorado has shown signs of recovery in employment. The state is up 10,800 jobs from six months ago and has posted modest but steady employment gains in the past quarter. Those are encouraging developments given the state’s job performance the last three years. Still, Colorado will have to do better to bring prosperity back. Figure 4
Colorado employment rebounds slowly
Total nonfarm employment (seasonally adjusted, thouands)
2,400 2,350 2,300 2,250
2007 - 2009 Recession
2,227.7
2,200 2,150 2,100 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through March 2011)
Job shortfall Job shortfall measures the difference between actual employment and what employment would have been if jobs had continued apace with working-age population growth instead of plummeting during the downturn — in short, how far the state has been “set back” by the recession in jobs. Tracking from the onset of the recession in December 2007, Colorado’s job shortfall stands at roughly a quarter-million jobs. (Figure 5) Figure 5
COLORADO JOB SHORTFALL SINCE ONSET OF DOWNTURN (December 2007 to March 2011) Working-age population growth
5.6%lank
Employment this month
2,228,200lank
Employment level needed (the total number of jobs in the state if job growth had kept pace with working age population growth)
2,482,994lank
Job shortfall
254,794 ank
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
Page 4 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Medicaid and CHP+ Since the downturn, Colorado has seen consistent and substantial caseload growth in Medicaid and Child Health Plan Plus (CHP+). Those programs provide medical care for low-income residents and children, respectively. Medicaid and CHP+ programs served 649,000 Coloradans in March. (Figure 6) In the current fiscal year, combined Medicaid and CHP+ caseload is growing seven times as fast as the state population, adding an average of 5,700 enrollees each month.6 That growth illustrates the vulnerability of many Coloradans during the tentative recovery. Figure 6
Spurred by recession, Colorado public health insurance enrollment increases steadily
Medicaid and CHP+ enrollment
700,000 650,000
648,630
600,000 550,000 500,000 450,000
2007 - 2009 Recession
400,000 2007
2008
2009
2010
2011
Source: Department of Health Care Policy and Financing data (through March 2011)
Page 5 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Food assistance The recession touched off a substantial need for the food assistance provided by the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. As with the state’s public health insurance programs, that need continued to grow a year and a half after the official end of the Great Recession. (Figure 7) According to the most recent count in January 2011, 443,242 Coloradans receive food stamps. (Figure 7) That is 48,000 more people than a year earlier. Overall, SNAP enrollment has increased 79 percent, or 195,000 individuals since the beginning of the 2007-09 recession.7 Such tremendous growth in need demonstrates the force of the past recession. Figure 7
Colorado food stamp enrollment continues to grow after recession 500,000
Number of individuals
450,000
443,242
400,000
350,000
300,000
250,000 2007 - 2009 Recession 200,000 2007
2008
2009
2010
2011
Source: Analysis of U.S. Department of Agriculture SNAP program data (through January 2011)
Eligible but not enrolled Food stamp enrollment does not fully reflect hunger in Colorado. According to a recent study by the U.S. Department of Agriculture (the federal agency that oversees SNAP) only 52 percent of Coloradans eligible for SNAP are enrolled. That ranks 48th in the county among states.8 Colorado’s poor performance is driven largely by problems administering food assistance. Eligible clients are required to complete a 26-page application, show multiple forms of identification and lawful residence documents, and verify income every three to six months. Furthermore, the Colorado Benefits Management System (CBMS) database, which is used to administer SNAP and other Colorado assistance programs, is plagued with problems. Since its introduction in 2004, CBMS has consistently failed to deliver timely application processing, and has exhibited unreliable performance. Colorado needs to improve CBMS and its administration of assistance programs to ensure eligible families get help in this time of unprecedented need.
Page 6 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Headed back down? The unemployment rate is a “lagging indicator,” meaning it changes after the economy as a whole does. In March, Colorado’s unemployment rate backed off from its all-time high, amidst job growth, labor force expansion and other positive signs of recovery. For now Colorado can only hope those are signs a strong recovery is under way. The continuing rise in demand for safety net services shows that recovery has a long way to go. Contact: Alec Harris Policy analyst [email protected] 303-573-5669, ext. 316
1
Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Mar. 18, 2011. 3 See Colorado Legislative Council Staff and Draper, Heather, “Jobless rate not the whole picture,” Denver Business Journal, April 15-21, 2011. 4 Also, Colorado Legislative Council Staff for the chart design. 5 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 6 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing . 7 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “December 2010 SNAP/Food /Stamp Participation Data,” Food Research and Action Center. 8 “State Supplemental Nutrition Assistance Program Participation Rates in 2008,” U.S. Department of Agriculture: Food and Nutrition Service, January 2011. 2
Page 7 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
