BLS data: Mild job recovery, $6.25B of Colorado wages lost in second quarter

The latest figures measuring the country’s employment health at the county level shows a mild recovery across Northern Colorado and the Boulder area, but show worrying signs as the country grapples with a pandemic spreading at unprecedented pace.

The data from the U.S. Bureau of Labor Statistics’s Quarterly Census of Employment and Wages was released Wednesday morning and represents some of the most in-depth details on just how deeply the pandemic struck the regional and statewide labor force in the first half of the year.

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Job recoveries through summer

All of the Northern Colorado and Boulder-area counties showed growing numbers of employees after April, when the stay-at-home orders expired at the end of the month. At that point, restaurants and non-essential businesses were able to recall furloughed employees and restart operations with a heavy emphasis on keeping people separated and outside when possible.

Larimer County had 142,316 employees in April, but saw that number increase to 155,976 in June. Weld County’s number of employed increased from 102,847 to 104,986 in that same period.

In the Boulder Valley, Boulder County saw its employment base recover from 166,027 in April to 174,085 in June, while Broomfield County went from 36,132 employees to 38,126 in the same period.

Statewide, Colorado went from an employment base of 2.387 million in April to 2.547 million in June.

However, none of these increases in employment amount to pre-pandemic levels, as 179,412 Coloradans who were employed in March and lost their jobs had not found work at the end of June.

Brian Lewandowski, executive director of the Business Research Division at the University of Colorado’s Leeds School of Business, said there isn’t one major driver of the weekly wage average dropping.

He pointed to institutional furlough days, including across the state government and at public universities, as one reason why average wages could have fallen.

Lewandowski also said many businesses haven’t recovered to their pre-pandemic employment headcount, which alters the outcome of the average wage formula.

“The loss of low paying jobs early in the pandemic actually increased the average wages in the series, but the add back of low wage jobs depressed average wages,” he said.

New business starts increased

One of the most acute fears in the onset of the pandemic was that it would force a wave of small-business closures. Yet, the opposite has occurred in Colorado, which recorded 2,275 new establishments in the three-month period.

All of the local counties reported new business activity as well, with Larimer adding 99, Weld adding 57, Boulder adding 27 and Broomfield adding 31.

However, Martin Shields, a professor and director of the Regional Economics Institute at Colorado State University, said the highly unusual economic situation makes it difficult to find a consistent narrative from new establishment figures.

For example, the data shows that Larimer County added 13 new restaurants and bars in the quarter despite shedding 5,940 jobs during the deepest part of the state’s stay-at-home period and a larger national narrative of potential mass closures of independent eateries.

$6.25 billion of lost wages in three months

While people were getting their jobs back, their lost wages range well into the billions of dollars.

Colorado’s paid wages fell from $45.57 billion in the first quarter of the year to $39.32 billion, amounting to a 13.7% drop from April to June.

About half of those lost wages were offset by state unemployment insurance supplemented by federal dollars from the CARES Act. The Colorado Department of Labor and Employment paid out just more than $3.02 billion in the second quarter of the year, according to agency data.

But the additional funding measures from Congress are due to expire at the end of the year. 

The Trump Administration, Senate Republicans and House Speaker Nancy Pelosi have been deadlocked for months on the size and details of another round of support, and another stimulus bill is unlikely until after President-elect Joe Biden takes office in late January.

Shields said the dropping wage dynamics are likely to put lower-income individuals in incredibly stressful situations, particularly if they have to pay medical bills and have lost their health insurance. He also said that loss of income reduces spending power that could be used at local businesses, which in turn hurts the tax revenues of local governments, and creates additional demands on the social safety net from the state.

All of these issues are likely to intensify without federal support.

“The inability of the federal government to act in a meaningful way to help people, businesses and communities is a horrible dereliction of their civic duty,” he said.

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