Charting COVID-19’s unequal impact on Colorado workers, one year later

Low-wage industries continue to lag far behind pre-pandemic levels

Red Rocks Amphitheatre in Morrison. The entertainment industry was part of one of the hardest-hit economic sectors in Colorado during the pandemic. (Getty Images)

It’s been one year since Gov. Jared Polis’ public health order shuttering bars, restaurants and entertainment venues went into effect across Colorado, beginning the state’s longest and most restrictive period of economic shutdowns, caused by the coronavirus.

It would still be weeks before Congress passed key relief measures like supplemental unemployment benefits and the Paycheck Protection Program, and over the ensuing month and a half, more than 375,000 Coloradans would lose their jobs. In April 2020, the statewide unemployment rate spiked to 12.1% — by far the highest level recorded in the 45 years it’s been tracked.

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Twelve months later, the accelerating progress of vaccination efforts and the passage of additional federal aid has led to a renewed sense of optimism from public officials. In recent briefings, Polis has spoken of the “final months of the pandemic” and expressed confidence that the summer of 2021 will be “very close to normal.”

New data released by federal officials and the Colorado Department of Labor and Employment, however, show that despite positive signs in early 2021, it will take many more months of very strong job growth to return to pre-pandemic unemployment levels. And it’s workers in low-wage industries like food service and entertainment who continue to suffer the greatest impacts from COVID-19’s economic fallout.

Unemployment has fallen by half — but is still double pre-COVID levels

For three months after the onset of the pandemic, Colorado’s official unemployment rate was higher than it had ever been before — but this period of extreme joblessness was relatively short when compared with past economic contractions. By July 2020, statewide unemployment had fallen back below 7.5%; by contrast, the Great Recession caused Colorado’s unemployment rate to stay above 7.5% for a 43-month period between May 2009 and November 2012.

Still, the state’s January 2021 unemployment rate of 6.6% is more than double what it was a year prior. After having the country’s fifth-lowest average unemployment rate in 2019, Colorado is now tied for 35th.

Colorado’s job recovery has tracked closely with the national average

With a few exceptions, however, Colorado’s rate of job recovery since the early months of the pandemic has tracked closely with the national average. As of January, the number of jobs that the state has added since May 2020 is the equivalent to about 57% of the jobs it lost in March and April 2020, according to the federal Bureau of Labor Statistics. That’s slightly higher than the national figure of 56%.

Colorado’s job recovery rate dipped in December 2020 amid a wave of new public-health restrictions prompted by surging COVID-19 cases and hospitalizations, including a temporary halt to in-person dining in many counties across the state. It also significantly exceeded the national average in May 2020, after Polis lifted his stay-at-home order and other statewide restrictions in advance of many other governors.

Some Colorado cities have rebounded more quickly than others

The Colorado Springs area leads other metropolitan regions across the state with a job recovery rate of 69%, a trend that state labor officials say is in large part attributable to the number of residents employed by military contractors, who were minimally affected by economic disruptions. By contrast, Weld County, home to the vast majority of Colorado’s oil and gas production, has recovered the equivalent of only 28% of its total pre-pandemic employment levels. At 55%, Denver’s recovery rate is roughly on par with the statewide average.

Parts of Colorado that are not included in one of the state’s seven metropolitan statistical areas, or MSAs, have seen a relatively strong overall job recovery rate of 67%. Because more granular employment data for those areas lags behind the statistics available for MSAs, it will be months before disparities within them can be better measured — but officials say that it’s likely that more affluent mountain resort communities have fared better than other rural areas of the state.

“I certainly believe that counties like Summit, Eagle, Pitkin are driving that,” Ryan Gedney, a senior economist with CDLE, said in a Monday press briefing.

Workers in low-wage industries are still being hit the hardest

Nearly 60% of the roughly 375,000 jobs lost in Colorado in March and April 2020 came in just three industries: retail, accommodation and foodservice, and arts and entertainment. Together, these sectors, classified as “low-wage industries” by the BLS, continue to account for the majority of out-of-work Coloradans, while workers in higher-paying industries experienced much less joblessness over the last year and have returned to nearly 100% of their pre-pandemic employment levels.

Industry-by-industry impacts vary sharply

More detailed data, meanwhile, shows that impacts have varied even more widely from industry to industry. Employment in the retail sector, for example, has rebounded to 102% of pre-pandemic levels, which state labor officials said was driven by growth in grocery stores and big-box retail chains as more people spent time at home during the pandemic. The food service industry’s recovery rate is 55%, just slightly below the statewide average.

Some industries, however, saw job losses continue beyond the most disruptive early months of the pandemic, including mining and logging — a classification that includes oil and gas — which shed an additional 4,600 jobs as the impacts of a sharp decline in oil demand reverberated throughout 2020. Employment in the government sector also continued to drop throughout the year, with an initial decrease of 13,600 jobs followed by another 11,100 jobs lost between May 2020 and January 2021, largely due to the impacts of remote learning on workers in public schools.

“Think of support workers who would typically be (employed) for in-person learning,” Gedney said. “Bus drivers, janitors, lunch workers. It’s pretty expansive.”

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