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Report: Shortage of workers, skilled labor costing Colorado $46B in GDP

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(The Center Square) – Colorado’s shortage of workers and skilled labor is costing the state approximately $46 billion annually in additional gross domestic product, according to a nonpartisan research organization.

“A substantial portion of the unemployed and marginally attached to the labor force are people with barriers to employment, such as disabilities, past incarceration, lack of childcare, and educational attainment challenges,” Tamra Ryan, the Common Sense Institute’s Coors Economic Mobility fellow, wrote in the report. “To address these issues, employers, educational institutions, and the workforce system need to innovate and better align with the jobs of the future.”

Ryan stated addressing these issues will bridge the gap between supply and demand in the labor market and lead to economic growth and improved opportunities for the workforce. She highlighted the integration of basic education with job training in a Washington State program and Utah’s “One Door Policy” for improving data sharing and support services between multiple government agencies.

“Not addressing the long-term barriers to employment hampers the supply of labor and adds a significant cost to both the individual, public services and the Colorado economy,” Ryan wrote.

The report emphasized Colorado’s education and training programs must better prepare workers for the workforce today and in the future. She referenced a Colorado Department of Higher Education report stating approximately 75% of the state’s jobs require education beyond high school, but only 49.9% of Colorado’s 2021 high school graduates enrolled in college.

“The idea that one must have a four-year degree or be consigned to low-wage work is false,” Ryan wrote. “Many jobs require a post-secondary credential rather than a degree. Forty-nine percent of jobs in Colorado require education and training beyond high school but not a four-year degree, yet only 35% of workers have the skills training needed for these jobs. The K-12 education system, employers, state programs, apprentice programs, and community colleges can play a role in preparing workers.”

The study found Colorado relied on new residents to fill job openings in the past, but net in-migration to the state has dropped the last two years and is expected to decline through 2050.

“Like the rest of the country, Coloradans are getting older,” Ryan said in a statement announcing the report. “With fewer young people expected to enter the workforce and more people expected to age out of work, our state cannot expect to fill the open jobs as it may have in the past.”

Colorado’s unemployment rate remained at 2.8% in June for the fourth straight month, according to the Colorado Department of Labor and Employment.

The state’s labor force participation rate – the percentage of working-age people who are working or actively looking for work – remained at 68.7% for the second straight month. Colorado’s labor force participation rate is the fourth-highest in the nation and six percentage points above the national rate of 62.6%.

Colorado’s manufacturing sector added 1,400 jobs in June after adding 1,900 in May. It’s the largest two-month job gain for the sector since the jobs rebound in May-June 2020 after the pandemic started in April 2020, CSI said in an analysis.

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