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Colorado To End Pandemic Unemployment Benefits In Sept. As Job Gains Continue

A sign advertises job openings at a gift shop in Estes Park in June 2021. Many mountain communities are struggling to find workers amid a crush of tourists.
Matt Bloom
A sign advertises job openings at a gift shop in Estes Park in June 2021. Many mountain communities are struggling to find workers amid a crush of tourists.

Colorado’s economy added 10,800 jobs in June as the pace of recovery cooled slightly, indicating a slow, but steady, rebound from the COVID-19 pandemic. Analysts expect the trend to last at least through the rest of the year.

The unemployment rate remained unchanged at 6.2%.

The latest numbers from the Colorado Department of Labor and Employment, released Friday, are likely to be seen as a good sign despite continued headwinds from labor and supply shortages and a stalling vaccination rate. Job growth has been in positive territory since January.

“I think it’s a fairly positive story that we’re looking at,” said Brian Lewandowski, an economist with the University of Colorado’s Leeds School of Business. “We’re not falling off the rails here. We’re still improving incrementally.”

Job growth holds steady in June

U.S. nonfarm payrolls, seasonally adjusted
Source: Colorado Department of Labor and Employment
Colorado Department of Labor and Employment
U.S. nonfarm payrolls, seasonally adjusted

Employment jumped most in the leisure and hospitality sector, with 5,300 jobs added, mostly at arts and entertainment venues. Professional and business services added 3,300 jobs.

Transportation and utility company payrolls grew by about 1,000 jobs, as did the real estate and rental leasing industries.

Weaker segments included oil and gas drilling and local governments, each adding fewer than 500 positions. No industries recorded significant declines in employment.

Average pay ticked up as well, climbing $1.23 to $31.58 an hour for all employees, following large jumps in previous months. The Colorado Department of Labor and Employment said wage increases could reflect a continued demand for labor at this point in the recovery.

The state’s shortage of workers has been well-documented, especially in tourism-dependent mountain communities, which are seeing record visitation but having a difficult time finding seasonal and full-time staff. Employers blame a mixture of factors, including high housing costs, worker visa backlogs and pandemic unemployment benefits.

“I’d say most of the state is going to continue to have this issue because of limited housing and higher prices,” said Ryan Gedney, senior economist with CDLE.

Positive job growth in May, revised up to 17,500, and April, revised up to 17,200, while not sluggish, put Colorado roughly in the middle of the pack when compared to other states’ recoveries. The addition of June’s numbers means the state has recovered 73.5% of the jobs it lost during the pandemic.

Carolyn McEndaffer, owner of Peppers Fast & Fresh Mexican Grill in Estes Park, prepares ingredients for customers. Peppers and other service industry businesses are struggling to hire workers.
Matt Bloom
Carolyn McEndaffer, owner of Peppers Fast & Fresh Mexican Grill in Estes Park, prepares ingredients for customers. Peppers and other service industry businesses are struggling to hire workers.

Other positive economic signs are emerging, too.

The labor force participation rate fell slightly to 68.5% — still the third-highest in the nation. Only North and South Dakota were higher.

Air travel has boomed through Denver International Airport in recent months, with July traffic on track to reach pre-pandemic levels. According to the airport, an estimated 1.25 million passengers flew through its gates through the first week of the month — a 2% increase from the same time frame in 2019.

Earlier this month, Colorado surpassed its goal of vaccinating 70% of its population against COVID-19.

Prior to that, the removal of mask mandates and capacity restrictions this spring allowed many businesses to function normally, even with the recent spike in COVID-19 cases. Public health officials say they’re concerned about the spread of the highly-contagious delta variant, but don’t expect to restore strict capacity restrictions that choked many restaurants and retail stores for much of last year.

New unemployment claims continue to fall from their record-high levels at the start of the pandemic, with intermittent spikes that officials attribute to fraudsters. A recent state audit found Colorado paid out more than $52 million in benefits to fraudulent accounts in 2020.

The labor department has responded by increasing digital security measures that help verify claimant identities. Staff say anyone who suspects they are a victim of fraud should report the issue on their website.

State ‘happy’ with results from Jumpstart incentive program

Instead of slashing pandemic unemployment benefits early like some Republican-led states, Colorado began paying workers to get off them in May. The hope was to help alleviate labor shortages across the state.

The labor department offered $1,600 to residents who went back to work that month. The offer fell to $1,200 for residents who went back to work in June.

As of Jul. 16, 18,670 people had opted into the program. The total amount paid out so far is $5.2 million, said Joe Barela, CDLE’s executive director.

“We’re happy to see the level of Coloradans who returned to work,” Barela said, adding that the department’s priority is now preparing claimants who are still collecting benefits for the end of several federal pandemic unemployment programs later this summer.

Pandemic unemployment programs will end Sept. 6

In line with a federal expiration date in September, Colorado is preparing to stop dispersing extra payments to residents who lost their jobs due to the COVID-19 pandemic.

The changes will impact several similar-sounding, but different programs. The list includes the Pandemic Unemployment Assistance Program (PUA), the Pandemic Emergency Unemployment Compensation Program (PEUC) and the Federal Pandemic Unemployment Compensation Program (FPUC).

The three programs, funded through various federal stimulus packages, are currently supporting at least 85,000 residents, said Gedney, the state economist. A large portion of the group is made up of self-employed residents, gig-workers and independent contractors who don’t qualify for standard state benefits.

“I expect those numbers to continue to decline as we get closer to September,” Gedney said. “But right now, that's a rough estimate on how many potential claimants we might have on those programs.”

Workers who qualify for Colorado’s standard state unemployment program won’t lose those benefits after the September deadline.

Many employers hope the end of benefits will help boost the labor supply, especially in service sector industries. Several forecasts predict the state will add roughly 90,000 jobs total by the end of 2021, with a full recovery of jobs lost during the pandemic expected sometime next year.

“I think we’re still on track,” said Lewandowski, the CU economist. “The three concerns that businesses really zero in on are inflation, supply chain constraints and worker shortages.”

I cover a wide range of issues within Colorado’s dynamic economy including energy, labor, housing, beer, marijuana, elections and other general assignment stories.
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