Colorado’s unemployment rate remains extremely low, tilting the advantage towards workers in a way not seen in more than a decade. Just 2.8 percent of people looking for a job in July don’t yet have one, according to the latest numbers from the state Department of Labor and Employment.
At first, Colorado’s low unemployment rate was seen as a bad thing. Economists worried that companies would struggle to find workers since most are already employed. But job growth has accelerated through 2018.
“I think this is perplexing. Where are we finding these workers?” asked CU Boulder economist Brian Lewandowski. He co-authored a mid-year job market report showing the state is on pace to add about 15,000 more jobs than they expected at the start of 2018.
The answer could be that workers, long shut out of the job market, are finally coming back. The labor force participation rate cratered in the years following the Great Recession, but it’s climbed substantially, from a low of 66.6 percent in 2015 to 69 percent now. That’s more 100,000 additional workers, and good for the fourth-highest labor participation rate in the country.
Labor force participation rose across age groups. “Which is a really positive sign,” because wages have to rise to attract scarce workers in Colorado, said Lewandowski.
Wage growth was up another 4 percent in July, according to the state labor department. That’s certainly compelling people to return to the job market.
“I think it’s definitely a great time for employees,” said Ryan Gedney, senior economist with the state Department of Labor and Employment. He said wage growth has been consistently strong for more than a year, and he predicts that will continue throughout 2018.
The employment rate has been at or below 3 percent for 21 consecutive months. It’s about as a tight a labor market as Colorado has seen in modern times.
“I think it’s comparable to the labor market we saw in the late 90s,” said Gedney. “As this long economic expansion continues, it could very well be the tightest labor market we’ve seen.”
Many workers are able to shop around for jobs they really want, whether that’s better hours, a dream career, or just more money.
At the same time, with less than one unemployed person per job opening in Colorado, employers cannot be as picky when selecting workers.
“Market advantage has shifted back to the employee,” said Lewandowski. “You have more power to set the terms of your hiring than you have before.”