Colorado Faces Decline in Labor Force as Workers Go Missing
Colorado is experiencing a concerning trend as a significant number of workers seem to be disappearing from the labor force, according to a recent state employment report for December. The state’s labor force saw a 0.6% year-over-year decline last month, a rate comparable to that observed during the Great Recession. This decrease, which began in September after a period of stagnation, resulted in the disappearance of 20,280 individuals from the workforce over the course of the year, primarily in the fourth quarter.
This decline is unprecedented outside of severe recessions or economic shocks like the COVID-19 pandemic. While the labor force saw a substantial drop in workers during the pandemic due to safety concerns, many returned to work once restrictions eased and vaccines became available. However, the current decline in the labor force appears to be driven by other factors.
One potential factor contributing to the shrinking labor force is an increase in retirements among older workers as Colorado’s population ages. Additionally, migration patterns play a significant role in the state’s workforce dynamics. Colorado experienced a net loss of 12,100 people from other states in the year leading up to June 30, with domestic migration declining sharply since the pandemic. This trend may be attributed to higher housing costs and limited job opportunities, prompting more residents to leave the state.
Furthermore, changes in immigration policies under the Trump administration have impacted international migration to Colorado, with stricter regulations leading to a decline in net international migration. The combination of these demographic shifts and policy changes has contributed to the current decline in the state’s labor force.
Despite a decrease in the labor force, Colorado’s unemployment rate has fallen from 4.6% to 3.8% over the past year, indicating a tightening job market. However, job growth remains relatively weak compared to historical trends, with nonfarm payrolls increasing modestly. The state’s population recently surpassed 6 million people, with a significant portion of residents actively participating in the workforce.
As Colorado grapples with a shrinking labor force and changing migration patterns, the state’s economic landscape continues to evolve. The impact of these trends on job opportunities, demographic composition, and overall economic growth remains a topic of ongoing concern and analysis.
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