Colorado’s historically low unemployment rate might be too much of a good thing, labor shortage puts squeeze on business (Denver: apartment, condo)

[Vision67]

https://www.denverpost.com/2020/01/2...ge-businesses/

"Ten years ago Colorado struggled with too many workers and not enough work. The problem is entirely different at the start of 2020 — too few workers to get the job done.

For consumers, that shows up in a lot more waiting — at stores, restaurants, medical offices. For workers, it is showing up in higher wages and more opportunities. For employers, it makes it tougher to expand, and in some cases keep up, which could cap growth in the state.

“We are in uncharted territory,” said Gary Horvath, a Broomfield-based economist. “I’m baffled by how companies are making this work.”

Uncharted as in RTD buses that don’t show up at their stops because there aren’t enough drivers, or Colorado school districts desperate to find 3,000 teachers or newspapers that don’t arrive on the doorstep because carriers are hard to recruit."

"Colorado’s seasonally-adjusted unemployment rate dipped to 2.5% in December, a record low in a series going back to 1976. In October and November, the rate was at 2.6%, which tied lows set in early 2017. The prior low before that was 2.7%, which was set in 2000 during the heated dot-com boom.

No labor market in the country is as tight as that of northeastern Colorado, with Yuma and Kiowa counties at a nation-leading seasonally unadjusted low rate of 1.1% in December. Right behind them is Phillips County at 1.2% and Baca and Cheyenne counties at 1.4%.

Although a low unemployment rate is better than a high one, going too far in either direction is not good for an economy, Horvath said. Colorado ended 2019 with the fourth-lowest unemployment rate in the country behind South Carolina, Vermont and Utah. But in the third quarter of 2019, it ranked only 43rd for economic growth.

So how low is too low when it comes to unemployment?

“Anything below 3.5% will continue to put incredible stresses on employers and labor markets,” said Richard Wobbekind, executive director of the Business Research Division at the Leeds School of Business at the University of Colorado Boulder."

It seems to me that this situation should drive wages higher. Will it?

[Di3s3l_Pow3r]

pay more, easy as that

Supply and Demand

[StealthRabbit]

RTD buses that don’t show up at their stops because there aren’t enough drivers, or Colorado school districts desperate to find 3,000 teachers or newspapers that don’t arrive on the doorstep because carriers are hard to recruit."

These industries have greater problems to overcome, some issue related to CO (passing the CDL drug test in a state with recreational use and extensive CDB marketing, or the CO EDU issues (pay and job security and school funding)...) or industry trends (newspapers),

The entire USA has a lot of job openings, but many choose not to work. (several problems with our societal enablement of that mindset and activity.)

Being and employer is not made easy. It is very expensive to hire and maintain workers.
HS grads (and even college grads) are not willing or able to arrive at work and perform a skill or service for your company. (Entitlement and "show-Me-How" mentality). Skills that were 'assumed' are no longer even known. (math, composition, reading a tape measure, driving a commercial vehicle, operating machinery, designing and building basic needs for the workspace, organizational skills, self starter / initiative).

Just like previous 12 - 16 yrs of school... "I'll just sit on my hands until you tell me exactly what to do, I don't have the perception or requirement to recognize needs".

Pay me more? I witnesses the results of that while living and working in Australia in 2016.
Home Depot type employee (Bunnings) "Hey, I don't have to help you find stuff or load your lumber on the truck. I get paid $18 / hr whether I help you or not, I choose NOT."

[hikernut]

Sounds a bit like year 2000. I was working in Longmont then, and recall there was a Quiznos near the office that would frequently be closed for lunch. Apparently they had a hard time retaining workers.

Honestly, less growth at this point would not be a bad thing. Let the infrastructure catch up with the population explosion.

[Mike from back east]

Population explosion? I'm reading all over the place that our birth rate is about 1.8 babies per woman which is below the 2.1 babies per woman needed to keep the population stable. Even with immigration we are not quite at replacement level. Most of the developed world, i.e., Europe, is at levels of 1.1 (Italy) to 1.5 which bodes ill for the 3% business growth that 'business' wants to see.

The Italian rate of 1.1 is especially interesting given that the nation is heavily of the Roman Catholic faith whose leadership in the Vatican does not approve of birth control measures (the pill, the condom) even though it's estimated that 98% of Catholics use the most prevalent methods of birth control.

More closely on-topic, the 5 counties mentioned by the OP are all on the border with Kansas or Nebraska, i.e., they have always been agricultural in nature and never had the industrialization of the Denver region. As ag areas these counties have been hollowing out for 125 years as farm machinery greatly reduced the need for large families to work the land and harvest crops. In other words, the unemployment rate in those counties is so low precisely because there are almost no jobs there to start with, able-bodied types have long left and there's not much of a safety net in those areas for any homeless types who've also migrated to big cities.

Lack of bus drivers in Denver probably is due to low wages, the difficulties of driving in a congested metro area, the often nasty job of dealing with the problematic members of the public, and perhaps the HR department lacks a system or resources for training and growing the needed workforce. In a society that values a college education for its children, I don't know anyone who sends their kids to college to be a bus driver, and I've never seen an ad on TV for bus driver school (even if such exists).

Overall, nationally and globally, people have gotten the message that 'jobs' are going away (for various reasons), that governments aren't going to help them, thus they are reducing family size accordingly, especially given the income inequality gap. I've said for sometime that we need to stop reproducing until we get labor markets tight enough to cause a rise in pay rates. We're getting there but we have a ways to go.

[hikernut]

Well okay, two different areas with different sets of problems.

I've never spent any significant time in eastern Colorado, although I did grow up in a rural area of the Midwest. The populations of those counties are very small. I'll guess that the low unemployment rate in those places is because so many younger people are moving away.

The Front Range, where the bulk of Colorado's population lives, has been growing faster than the country for a long time. I found some metro growth numbers for 2010-2018. The growth rank of the five metros from Ft Collins down to Colorado Springs are #5, #25, #37, #41, and #72. That is out of 384 metro areas, so all are in the top 20% for growth.

Obviously this is not an issue unique to Colorado. Most of the places where people, and young people in particular, want to live are expensive. Only people with the right degrees/skills are able to afford a halfway decent life in these places. So how will these areas continue to exist when so many jobs do not pay one enough to afford a small apartment? I would think struggling financially gets old pretty quickly, but empirical evidence says otherwise.

[StealthRabbit]

I note that Safeway often has delayed shipments due to lack of drivers, (shipping dept says' it is because so many fail the random drug tests)

I have been 'randomly' tested as many as 7x / yr as CDL drivers are required belong to a consortium 'pool' that has regular as well as random / no pre-notice drug tests. Many fail due to CBD.

Population growth is down, that should be a good thing for the automated jobs. McD is trying to go automated ASAP. The 'Self Check' is quite handy now also at Costco.

[COcheesehead]

We’ve had to hire down in skill level to get the workers we need or relocate workers from other states. Both cost more and the risk level increases because after all that money is spent with moving or training, there is no guarantee the new worker will benefit us.
Colorado also used to be an easy sell to out of staters. Not so much anymore. Once a potential employee starts looking at rents or house prices online they get sticker shock.
It’s a tough situation. We end up paying more, but not directly to the employee. The costs go into development and other hiring costs. For a small business like ours, it’s an impediment to growth and hits the bottom line. I am sorry to say but in 20 years or less automation and AI will be replacing some of the functions we now hire people to perform.

[vwgto]

New to Castle Rock, and in one week: Wendy’s dining room closed because not enough workers (hiring card in bag), only self service lanes open in Lowe’s due to not enough workers, and limited bakery items in King Soupers due to staffing. Seems new businesses requiring entry level help would hesitate.

[Vision67]

My wife waited yesterday for about 25 minutes at the King Soopers deli for service. The staff was down to 2 workers and about 10 customers were queued.

On the same day, I observed 2 guys on medians with cardboard signs begging for handouts.

I wonder if a $20 per hour minimum wage would solve both problems.