CO recession
Colorado Recovery Watch Sept. 16, 2011 National and state unemployment rates experienced minimal change in August. Colorado was one of 12 states that saw no change in the unemployment rate. Moreover, a decrease in employment compounds the shrinking labor force. Data released recently by the U.S. Census Bureau show increasing poverty in Colorado and a simultaneous decrease in the number of people lacking health insurance. The slow recovery has left many Coloradans relying upon public assistance programs for health care and help buying food. Unemployment Colorado saw no change in the unemployment rate from July to August, remaining at 8.5 percent. Similarly, the national unemployment rate remained at 9.1 percent. (Figure 1) Colorado’s unemployment rate has remained below the national average for five consecutive months, yet ranks 26th worst among states. Figure 1
Unemployment rate remains high Unemployment rate (seasonally adjusted)
12%
10%
9.1% 8.5%
8%
6%
4%
2%
United States Colorado
0% 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through August 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 Though all the recessions in the past 30 years affected Colorado’s unemployment rate, the 200709 recession has had an unusual residual effect on Coloradans. The highest the unemployment rate reached during the past two recessions was 6.3 percent before declining again. The current downturn has been far worse as Colorado’s unemployment rate has been two full percentage points higher than that level for more than two years. (Figure 2) Moreover, the state’s unemployment rate has not been below the current 8.5 percent since April 2009. Figure 2
High unemployment rate compared to past recessions 10% 9% 8% 7% 6% 5% 4%
3% 1981 Recession
2%
1990 Recession 2001 Recession
1%
2007 Recession
0% -3
0
3
6
9
12
15 18 21 24 27 30 33 Months from start of recession
36
39
42
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey (Data through August 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 labor foce today is significantly smaller than it was at the start of the recession. There are about 68,000 fewer active workers in the labor force today than there were when the labor force peaked in Novermber 2008. (Figure 3) About 2,000 workers left the labor force from July to August. Tying the recent declines in the labor force to the flat 8.5 percent unemployment rate shows a lack of available jobs as well as a number of discouraged workers. Figure 3
Colorado unemployment rate and labor force (seasonally adjusted) 10%
2,800
8%
2,750
7%
Labor force
Unemployment rate
9%
6% 5%
2,700
4%
3%
2,650
2% 1% 0%
2,600 2007
2008
2009
2010
2011 Labor Force Unemployment Rate 1
Source: U.S. Bureau of Labor Statistics (data through August 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 In August, Colorado was down 110,500 jobs since the start of the recession in December 2007, a rate that ranks 26th worst in the nation. 2 Coloradans lost almost 2,000 jobs since July, again demonstrating the persistence of a tough job market. (Figure 4) On the other hand, construction employment increased substantially, adding more than 3,000 jobs in the past month, an equivalent number to those lost in construction since February. Figure 4
Colorado employment declines slightly
Total nonfarm employment (seasonally adjusted, thouands)
2,400
2,350
2,300
2007 - 2009 Recession
2,250
2,239.9
2,200
2,150
2,100 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through July 2011)
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
Job shortfall The 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. Colorado’s jobs shortfall, or the difference between the number of jobs Colorado has and the number it needs to regain its pre-recession employment rate, is 257,407. That number includes the 110,500 jobs lost plus the 9,500 jobs needed each month to keep up with the 6.3 percent growth in population that Colorado has experienced in the 43 months since the recession began.3 (Figures 5-6) As the jobs deficit shows, Colorado has not recovered from the Great Recession. As elected officials at both the state and federal level make policy choices to deal with budget shortfalls, they should avoid decisions that threaten to throw this very tentative recovery into reverse. Putting workers back to work needs to be the primary goal for lawmakers. Figure 5
JOB SHORTFALL SINCE RECESSION BEGAN (DECEMBER 2007) Working age population growth
6.3%
Jobs this month Jobs needed
2,239,900 2,497,306
(the number of jobs total in the state if job growth kept pace with working age population growth)
257,406
Job shortfall
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
Figure 6
The jobs deficit 3000 2500 2000 1500
Jobs needed to keep up with population growth Jobs lost since December 2007
1000 500
Employment level since 2000
0
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
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
Increase in public health insurance Data released Sept. 13 by the U.S. Census Bureau show the importance of safety-net programs such as Medicaid, which has accommodated dramatically more Coloradans since the Great Recession began in December 2007. Because of small sample sizes, the data are presented as two-year averages, diminishing the magnitude of changes. The data show the share of people lacking health insurance in Colorado, known as the state’s rate of “uninsurance,” decreased 2.4 percent from 2006-07 to 2009-10. That includes a 5.1 percent decrease in the rate of uninsurance for children. Medicaid has played a key role in expanding health coverage, increasing enrollment to an additional 4 percent of the state’s population since 2006-07 and to an additional 7.2 percent since the beginning of the decade. (Figure 7) Figure 7
Medicaid takes up the gap in Colorado Percentage of Coloradans on Medicaid
30%
24.8%
25% 20%
15.7%
15%
Overall
12.4%
11.0%
Children
8.5%
10%
5.2% 5% 0%
1999-2000
2006-2007
2009-2010
Source: U.S. Census Bureau Current Population Survey 2010
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
Food assistance Coloradans continue to increasingly rely on public help buying food to mitigate the effects of the recession. According to the most recent count in June, 464,498 Coloradans received nutrional assistance from the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. (Figure 8) That is an increase of 4,206 people from May, again highlighting the importance of the state’s safety nets.4 Figure 8
Colorado food stamp enrollment continues to grow after recession 500,000 464,498 Number of people
450,000 400,000 350,000 300,000
250,000
2007 - 2009 Recession
200,000 2007
2008
2009
2010
2011
Source: U.S. Department of Agriculture Monthly State Level Participation Report (through June 2011)
Increase in poverty underlines depth of recession Recent data from the U.S. Census Bureau show Colorado’s poverty rate for 2009-10 was 12.3 percent, an increase of 2.5 percent since 2006-07. That means an estimated 617,000 Coloradans are in families with incomes at or below the federal poverty level of $10,890 for an individual or $22,350 for a family of four. Median household income decreased by $4,356 since 2007-08 to $58,647 in 2009-10. Rising poverty across the state and increased use of public medical assistance programs and food stamps should raise warning flags to policymakers. The state must continue to provide vital services to Coloradans while they face the challenges of a slow economic recovery. Doing otherwise would threaten the health and vitality of our state. Contact: Ben Felson CC/Rice Fellow [email protected] 303-573-5669, ext. 316 1
Colorado Legislative Council Staff for the chart design. Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 3 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 4 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “Latest Available Month - State Level Participation,” USDA Food and Nutrition Service. 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 2
Unemployment rate remains high Unemployment rate (seasonally adjusted)
12%
10%
9.1% 8.5%
8%
6%
4%
2%
United States Colorado
0% 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through August 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 Though all the recessions in the past 30 years affected Colorado’s unemployment rate, the 200709 recession has had an unusual residual effect on Coloradans. The highest the unemployment rate reached during the past two recessions was 6.3 percent before declining again. The current downturn has been far worse as Colorado’s unemployment rate has been two full percentage points higher than that level for more than two years. (Figure 2) Moreover, the state’s unemployment rate has not been below the current 8.5 percent since April 2009. Figure 2
High unemployment rate compared to past recessions 10% 9% 8% 7% 6% 5% 4%
3% 1981 Recession
2%
1990 Recession 2001 Recession
1%
2007 Recession
0% -3
0
3
6
9
12
15 18 21 24 27 30 33 Months from start of recession
36
39
42
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey (Data through August 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 labor foce today is significantly smaller than it was at the start of the recession. There are about 68,000 fewer active workers in the labor force today than there were when the labor force peaked in Novermber 2008. (Figure 3) About 2,000 workers left the labor force from July to August. Tying the recent declines in the labor force to the flat 8.5 percent unemployment rate shows a lack of available jobs as well as a number of discouraged workers. Figure 3
Colorado unemployment rate and labor force (seasonally adjusted) 10%
2,800
8%
2,750
7%
Labor force
Unemployment rate
9%
6% 5%
2,700
4%
3%
2,650
2% 1% 0%
2,600 2007
2008
2009
2010
2011 Labor Force Unemployment Rate 1
Source: U.S. Bureau of Labor Statistics (data through August 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 In August, Colorado was down 110,500 jobs since the start of the recession in December 2007, a rate that ranks 26th worst in the nation. 2 Coloradans lost almost 2,000 jobs since July, again demonstrating the persistence of a tough job market. (Figure 4) On the other hand, construction employment increased substantially, adding more than 3,000 jobs in the past month, an equivalent number to those lost in construction since February. Figure 4
Colorado employment declines slightly
Total nonfarm employment (seasonally adjusted, thouands)
2,400
2,350
2,300
2007 - 2009 Recession
2,250
2,239.9
2,200
2,150
2,100 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through July 2011)
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
Job shortfall The 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. Colorado’s jobs shortfall, or the difference between the number of jobs Colorado has and the number it needs to regain its pre-recession employment rate, is 257,407. That number includes the 110,500 jobs lost plus the 9,500 jobs needed each month to keep up with the 6.3 percent growth in population that Colorado has experienced in the 43 months since the recession began.3 (Figures 5-6) As the jobs deficit shows, Colorado has not recovered from the Great Recession. As elected officials at both the state and federal level make policy choices to deal with budget shortfalls, they should avoid decisions that threaten to throw this very tentative recovery into reverse. Putting workers back to work needs to be the primary goal for lawmakers. Figure 5
JOB SHORTFALL SINCE RECESSION BEGAN (DECEMBER 2007) Working age population growth
6.3%
Jobs this month Jobs needed
2,239,900 2,497,306
(the number of jobs total in the state if job growth kept pace with working age population growth)
257,406
Job shortfall
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
Figure 6
The jobs deficit 3000 2500 2000 1500
Jobs needed to keep up with population growth Jobs lost since December 2007
1000 500
Employment level since 2000
0
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
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
Increase in public health insurance Data released Sept. 13 by the U.S. Census Bureau show the importance of safety-net programs such as Medicaid, which has accommodated dramatically more Coloradans since the Great Recession began in December 2007. Because of small sample sizes, the data are presented as two-year averages, diminishing the magnitude of changes. The data show the share of people lacking health insurance in Colorado, known as the state’s rate of “uninsurance,” decreased 2.4 percent from 2006-07 to 2009-10. That includes a 5.1 percent decrease in the rate of uninsurance for children. Medicaid has played a key role in expanding health coverage, increasing enrollment to an additional 4 percent of the state’s population since 2006-07 and to an additional 7.2 percent since the beginning of the decade. (Figure 7) Figure 7
Medicaid takes up the gap in Colorado Percentage of Coloradans on Medicaid
30%
24.8%
25% 20%
15.7%
15%
Overall
12.4%
11.0%
Children
8.5%
10%
5.2% 5% 0%
1999-2000
2006-2007
2009-2010
Source: U.S. Census Bureau Current Population Survey 2010
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
Food assistance Coloradans continue to increasingly rely on public help buying food to mitigate the effects of the recession. According to the most recent count in June, 464,498 Coloradans received nutrional assistance from the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. (Figure 8) That is an increase of 4,206 people from May, again highlighting the importance of the state’s safety nets.4 Figure 8
Colorado food stamp enrollment continues to grow after recession 500,000 464,498 Number of people
450,000 400,000 350,000 300,000
250,000
2007 - 2009 Recession
200,000 2007
2008
2009
2010
2011
Source: U.S. Department of Agriculture Monthly State Level Participation Report (through June 2011)
Increase in poverty underlines depth of recession Recent data from the U.S. Census Bureau show Colorado’s poverty rate for 2009-10 was 12.3 percent, an increase of 2.5 percent since 2006-07. That means an estimated 617,000 Coloradans are in families with incomes at or below the federal poverty level of $10,890 for an individual or $22,350 for a family of four. Median household income decreased by $4,356 since 2007-08 to $58,647 in 2009-10. Rising poverty across the state and increased use of public medical assistance programs and food stamps should raise warning flags to policymakers. The state must continue to provide vital services to Coloradans while they face the challenges of a slow economic recovery. Doing otherwise would threaten the health and vitality of our state. Contact: Ben Felson CC/Rice Fellow [email protected] 303-573-5669, ext. 316 1
Colorado Legislative Council Staff for the chart design. Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 3 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 4 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “Latest Available Month - State Level Participation,” USDA Food and Nutrition Service. 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 2
