Colorado residents jumped back into the employment pool at a faster rate than those in any other state last year, but the big splash they made raises questions over how many more people are left to fill future openings.
The share of Colorado adults employed rose from 64.9 percent in 2016 to 66.2 percent, the biggest percentage point move measured in any state in 2017, according to the U.S. Bureau of Labor Statistics.
Only 12 states even managed to increase their employment-to-population ratio last year. Colorado, by contrast, saw its largest gain since 1979, when the ratio surged 2 percentage points.
The employment-population ratio measures the share of adults older than 16 who are working, not counting people in prison, an institution or the military. It includes the self-employed as well as those holding a job.
Colorado’s mark hit a high of 71.6 percent in 1998 during the the tech and telecom boom. It hit a low of 63.5 percent in 2013.
The statistic in the short run is sensitive to economic shifts. When the economy is growing, as it is now, labor participation rises. But demographic trends are a bigger force over the long term, said Ryan Gedney, a senior economist with the Colorado Department of Labor and Employment.
A smaller share of young adults, ages 16 to 24, are employed, and a larger share are going to college after graduating than in prior years.
The state’s rapidly aging population remains the biggest obstacle to getting back to the old highs, at least in this generation.
Back in 2000, only a tenth of Colorado’s labor force was age 55 or older. Today, it is running closer to 20 percent, Gedney said. That matters because older workers are more likely to retire or suffer a disability that prevents them from working.
Nationally, only six in 10 adults are employed, so Coloradans fall in the camp of those keeping busy. Colorado, which historically has ranked around the 8th most employed population, now holds the sixth spot. North Dakota leads with an employment ratio of 69.6 percent.
“I think the state does still have some spare capacity. But demographics are working against us as the population ages,” said Brian Lewandowski, an economist at the University of Colorado Boulder Leeds School of Business.
Two signs that labor market slack is disappearing are increasing wages and the willingness of employers to hire workers they might have previously passed over.
“Perhaps companies aren’t quite as picky about a person’s repertoire of education and skills in this tight market, making some sidelined potential employees to re-enter the labor force,” he said.
Employers will need to pay more, lower their education and skill requirements, train more on the job and substitute technology for labor where they can, he said.
Gedney said employers should reconsider their stance toward workers age 55 and older, who spend twice as much time unemployed as younger workers do when they lose their jobs.
The share of prime-working age adults, defined as those ages 24 to 54, is nearly back to prerecession levels in Colorado, leaving either younger or older workers to fill the gap, he said.
