Because recession hit later, Colorado not a leader in government job creation

By Rich Jones

Last week, the Journal carried a story that said Colorado was almost tops in the nation in creating local, state and federal government jobs since the start of the Great Recession. (Colorado 4th for government job gains through recession, March 27, 2012)

The story was based on numbers crunched by G. Scott Thomas for The Business Journals, but the numbers don't tell the full story, at least as far as Colorado is concerned.

Mr. Thomas' numbers are correct, but he missed the mark on the start of the Great Recession in Colorado. The reason is that Colorado's economy remained stronger longer and entered the recession almost a year after the rest of the country. When we look at the numbers using the appropriate time frame for Colorado, they tell a different story.

Even though December 2007 is the official start of the recession nationally, Colorado experienced growth in employment, wages and total personal income throughout the first half of 2008.

The Legislature's September 2008 economic and revenue forecast found that although Colorado's economy had slowed considerably, it was not in a recession. It was not until the December 2008 forecast that the state's economists concluded that Colorado had entered a recession.

Thomas examined the period January 2008 through January 2012, and concluded that the number of state, local and federal jobs increased by 10,900, according to data from the Bureau of Labor Statistics.*

However, for the period January 2009, shortly after Colorado entered the recession, through January 2012, the number of state, local and federal jobs increased by only 1,700, according to the same BLS data. And local government jobs declined by 4,000 over this period, probably reflecting cuts by school districts.

If you assume that Colorado entered the Great Recession earlier, in the fourth quarter of 2008, and compare the period October 2008 through January 2012, you find that the total number of government jobs grew by 3,100 - still far below Thomas' number.

Most of the growth in government jobs that Mr. Thomas found in his analysis - 7,800, or 72 percent of the 10,900 total - occurred between January 2008 and October 2008, a period before Colorado entered the recession.

In addition, most of the government jobs that were created over the last three to four years have been state jobs, which include faculty at colleges and universities. This is not surprising, given that there are 39,000 more students enrolled in state colleges, universities and community colleges than there were in the fall of 2008, when the recession began in Colorado. To put this into perspective, the number of students grew by 19 percent over this period while the number of all state workers grew by 6 percent.

Our point is that an analysis of government employment growth needs to accurately reflect when Colorado entered the Great Recession. When you do that you see that Colorado was not a leader in adding government jobs.

*(Mr. Thomas put the growth in jobs at 11,800; however a review of BLS data on April 3, 2012, shows the total to be 10,900. The 900-job difference is accounted for by the difference between Mr. Thomas' January 2012 total of 391,300 and January 2012 total reported by the BLS of 390,400.)

The writer is director of policy and research at the Bell Policy Center, a progressive think tank based in Denver.