In 2019, U.S. News ranked Colorado‘s economy No. 1 in the nation, driven by 2.3% job growth compared to a 1.2% national average, a 2.5% unemployment rate, and 4.87% growth in personal income per person.
Ah, those were the days.
The upheaval brought on by the coronavirus pandemic this year has left the economy in tatters. The unemployment rate jumped to 12.2% in April, the state has lost 128,000 jobs and experienced a 9% drop in GDP.
Low-wage earners and women with kids have been especially hard hit. Employment among low-wage earners dropped roughly 25%. And 40,000 women with kids have left the workforce, according to data collected by the Colorado Business Roundtable.
And yet, Colorado is now faring better than national averages in its rebound.
In a quarterly presentation at the Capitol in September, state analysts said Colorado had regained 39% of jobs lost since the pandemic began in March, halving the jobless rate from 12.2% to 6.4%.
But with a new surge of coronavirus cases and new restrictions this winter, the crisis is far from over. The big question is: Will we ever get back to where we were in 2019, and if so how?
How do we build our long-term road to recovery?
The Colorado Business Roundtable and the Common Sense Institute have assembled an influential group of Colorado leaders in energy, aerospace, tech, finance and real estate, and thought leaders on economic development and the future of work to do just that, build a roadmap for our sustained recovery.
Their goal? A blueprint to “reopen, rehire and recharge Colorado’s economic recovery in the short and long term.” The initiative kicks off with a launch event Thursday gathering together 150 participating leaders.
The three pillars of their "Road to Recovery" initiative are simple but crucial:
1. Increase competitiveness with other states
2. Modernize the state’s workforce
3. Invest in infrastructure
The first pillar prioritizes a welcoming business environment made up of lower income-based taxes, fewer regulations and an investment in “high-value” and “wealth-creating” jobs.
The report has identified nine key industries the execs believe will drive the regional recovery: aviation, bioscience, broadband, digital communication, energy and natural resources, financial services, food and beverage production, health care and wellness, and IT-software.
But the roadmap also envisions a “get women back to work” initiative and a sustained effort to make housing more affordable to draw new workers to the state. And the roadmap highlights the need to make child care more affordable to draw those new workers here as well. (Here’s something I didn’t know: Colorado has the eighth highest cost of child care in the country.)
The second pillar calls for “upskilling” programs to retrain workers for the jobs that will emerge after COVID, and tapping state and federal stimulus funds for digital devices and internet connectivity to ensure all Coloradans, both urban and rural, have the tech infrastructure they need for those new jobs.
“We as a state rate second highest in demand for some sort of post-secondary credential (beyond high school),” said Kristin Strohm, president and CEO of the Common Sense Institute. “Seventy-four percent of all jobs in Colorado require post-secondary education, and we have a major gap right now. Only 64% of Colorado high school students go on to receive post-secondary education. So we’re having to import talent to meet our workforce needs.”
Debbie Brown, president of the Colorado Business Roundtable, says rethinking education is as important as investing more in education, building on innovations that are already working. For example, the Denver Office of Economic Development has started a program that provides adults from 24 to 30 years old with scholarships to help them retrain for jobs of the future.
Lastly, in order to come out of COVID well, Colorado absolutely has to close its $500 million-$650 million funding gap for state and local infrastructure maintenance.
Our transportation system isn’t keeping up with our growth. At the end of 2019, Colorado ranked 42nd in the state of its infrastructure, according to Strohm. The report recommends indexing the gas tax, which hasn't been raised in years, and a fee or tax on "vehicle miles traveled."
Overall, the plan is built out of many such 10,000-foot ideas, but nothing to get the bartender who just lost his job back on his feet right away, or bail out struggling small businesses to hold them over until people start to frequent their businesses again.
But the whole idea of this initiative is to focus on the long term, said Strohm.
“There has been a lot of great task forces focused on the short term," Strohm said. "The governor had one, Denver had one that businesses participated in." But with the severe disruptions that have taken place amidst COVID, Strohm and Brown don't think Colorado needs "Band-Aids," but rather "long-term recommendations that will be a great tool for business leaders, policy makers, community leaders, and then in six months, and the next year and the next two years, to come back to as we come out of the recession.”
Speaking of those other task forces, The Road to Recovery’s priorities are different than those recently enunciated by former Denver Mayor Federico Peña, head of Gov. Jared Polis’s Economic Recovery team.
He identified three broad reforms for recovery:
1. Adopting innovative business practices
2. Transforming our attitudes about fellow Coloradans
3. Reevaluating the roles of governments
“We must improve access to quality health care for all,” Pena wrote in a recent op-ed in the Colorado Sun, “provide child care for indigent workers, support teachers and caregivers, and develop effective programs for the homeless and mentally ill."
Peña’s is more of a Democratic road to recovery, and the new initiative a Republican road, but they converge on the distant horizon more than would appear at first drive.
Peña’s plan also calls for “a new, technologically-advanced economy. Innovative retraining programs to assist workers transitioning to our new economy are essential. We can and should invest in rural broadband to support online education and to encourage new business investments throughout Colorado.”
The problem is, the governor’s task force has been disbanded already after helping guide the governor through the early stages of the pandemic.
So the private sector, via this initiative, is hoping to step in and fill the gap.
“It is a time for the private sector to come to the table and think about long-term economic solutions,” said Brown, who mentioned that members of the governor's staff are also contributing to the report.
The initiative is modeled on an initiative from a sister business roundtable in Michigan called “Michigan’s Road to the Top 10," which utilized the private sector "to kind of lean in."
Funny, but Peña also called for more public/private partnership:
“This will require a complete reexamination of the proper role of governments at all levels," he wrote. "New partnerships with the private sector, foundations and civic groups must be instituted to effectively address the fundamental needs of all Coloradans in order to make us first in the nation in caring for its people."
In the long run, Strohm, Brown and Peña are all pretty bullish about a full Colorado recovery, and then some.
“We have to figure out how not to let hospitality, tourism get left behind. But other industries are going to be going gangbusters,” said Brown. “I think the thought is, we’re going to come out of this really strong."
Strohm pointed out that business licenses saw a 40% increase in the third quarter over those in the third quarter of 2019, the highest jump since 2007. A lot of people are starting their own businesses after losing their jobs.
Political scientist Tom Cronin reminded me this week that after the Spanish flu epidemic finally ended 100 years ago, America had so much deferred spending and entrepreneurial energy and pent-up desire for social contact and just sheer fun that the boom times of the Roaring Twenties followed.
Wouldn’t it be something if, after the dark winter ahead, these Twenties began to roar as well?