{"id":1403626,"date":"2026-02-08T08:03:17","date_gmt":"2026-02-08T13:03:17","guid":{"rendered":"https:\/\/www.thenewsherald.com\/?p=1403626&preview=true&preview_id=1403626"},"modified":"2026-02-08T08:03:29","modified_gmt":"2026-02-08T13:03:29","slug":"colorado-labor-force-shrinking","status":"publish","type":"post","link":"https:\/\/www.thenewsherald.com\/2026\/02\/08\/colorado-labor-force-shrinking\/","title":{"rendered":"Colorado\u2019s workforce has been shrinking since September \u2014 and that could spell trouble"},"content":{"rendered":"

Buried deep within an otherwise routine state employment report for December is a troubling mystery. Colorado is starting to see an alarmingly large number of workers go missing.<\/p>\n

Colorado\u2019s labor force shrank 0.6% year-over-year last month, a monthly decline matching the pace seen during the Great Recession. After flatlining in August, the labor force, those working or looking for work, has been retreating since September. For the year, 20,280 people vanished from its ranks, mostly in the fourth quarter.<\/p>\n

That has never happened outside a severe recession or economic shock like the COVID-19 pandemic.<\/p>\n

From April 2020 to March 2021, workers removed themselves from the labor force in record numbers. Giving up a paycheck to avoid landing on a respirator seemed like a fair trade-off to many older workers during the pandemic. The defections were unprecedented, triggering a 3.4% drop in the labor force in July 2020. But they were short-lived. People returned once restrictions eased and vaccines became available.\n

Another 12-month stretch of a draining labor pool occurred from September 2009 to August 2010 during the housing crash and Great Recession. People couldn\u2019t easily replace the jobs they lost. Many gave up trying. That contributed to annual declines of 0.7% and 0.6% during the worst months.<\/p>\n

The mother of all Colorado labor force deflations happened from July 1985 to June 1989. It started during a severe oil and gas downturn, which was followed by a lending crisis, which was followed by a collapse in commercial real estate and home values. It was such an ugly period economically that companies and people packed their bags and left the state in droves.<\/p>\n

The year-over-year drops reached a high of 0.9% and 0.8% in 1989, but most months ran lower, with some positive months mixed in. But all those Colorado natives kept graduating from high school and college. The unemployment rose to as high as 8.4% in December 1985 and January 1986. The workers who stayed gutted it out. Better times returned in the 1990s.<\/p>\n

There is no health crisis keeping people home, no recession triggering major layoffs and no collapse in a pillar of the state economy. So what might be driving the decline in the number of workers?<\/p>\n

The easy out is to blame statistical noise. The household survey \u2014 used to determine the size of the labor force and the unemployment rate \u2014 is subject to revisions. The federal government shutdown in October<\/a> might have mucked things up. Below-average snowfalls might have reduced demand for resort workers. The list goes on.<\/p>\n

But the decline is large and accelerating, and it started before the shutdown. It likely reflects a real shift, said Brian Lewandowski, executive director of the Business Research Division at the Leeds School of Business at the University of Colorado Boulder.<\/p>\n

\u201cI think the current softening could be a mixture of both the market (demographics) and policy,\u201d he said.<\/p>\n

One demographic piece involves more workers retiring. The mirror doesn\u2019t lie. Colorado\u2019s population is getting older. The long-predicted silver tsunami may finally be sucking workers out of the labor pool. But aging is a slow-moving trend, not akin to an earthquake.<\/p>\n

Migration is a more plausible force behind what is happening. Colorado lost 12,100 more people than it gained from other states in the year through June 30, according to a population update Tuesday from the U.S. Census Bureau<\/a>.<\/p>\n

That trend may have accelerated in the second half of the year based on what is happening to the labor force. Colorado\u2019s net domestic migration is down sharply since the pandemic. Blame higher housing costs<\/a> and fewer job opportunities. More longtime residents appear to be picking up and moving out. Last year, Colorado became one of five states with significantly more outbound than inbound moves, according to a survey by United Van Lines<\/a>.<\/p>\n

From the reopening of the economy following the pandemic through 2024, Colorado saw big increases in the number of people arriving from other countries. Migration to Colorado historically has been 80% domestic and 20% international. That ratio flipped this decade, according to the State Demography Office<\/a>.<\/p>\n