September unemployment numbers released earlier this month may have looked positive at first glance: La Plata County’s unemployment rate fell to 5.8 percent from 6.3 percent in August and from 6.1 percent in September 2011.
But the decline is caused by a worrying trend, said Roger Zalneraitis, director of the La Plata County Economic Development Alliance.
“Sigh. Someone said if the U.S. keeps going the way it’s going, we’re going to achieve full employment because no one’s going to be in the labor force anymore. That feels like what is happening here,” he wrote in an email about the numbers.
While unemployment bounces around from month to month, La Plata County’s labor force has been on a slight, but noticeable, decline since 2008.
The county’s labor force has decreased from 31,610 to 30,067 during the last four years. The number of firms also slid downward, falling from 2,650 in 2008 to just more than 2,400 in 2012.
A shrinking labor force can indicate one of two things, Zalneraitis said. Either more people are leaving the community to look for work, which is never good for an economy, or a growing group of workers are dropping out of the labor force because they have stopped looking or are no longer available to work.
In La Plata County’s case, population data doesn’t indicate that people are leaving the area en masse. The county’s population increased from about 48,800 between 2005 and 2007 to 51,500 between 2009 and 2011, according to the U.S. Census Bureau.
But a breakdown of population growth by age hints at what Zalneraitis said is a troubling trend: a decline in the working-age population.
Since 2005, the number of people 50 or older has increased by 2,800 people while the number of 20-to-49-year-olds has decreased by about 1,000.
“One could make a case that we’ve seen a stagnation or slight loss in a key portion of our labor force here in La Plata County,” Zalneraitis wrote in an email. “That could make it harder for companies to find sufficient labor force when they start hiring again.”
Mark Prouty, local branch manager with SOS Employment Group, said he has noticed a similar out-migration. It was noticeable beginning in 2008, especially with employees in the construction industry, Prouty said. Foreign workers also have moved back to their home countries in larger numbers, he said.
In an aim to help businesses and employees alike, the company is pressing companies to hire workers even if they think they might be overqualified, a practice most hesitated to do in the past.
“We’re encouraging (companies) to take advantage of that situation,” he said. “(Workers) may have so many years of experience in a field, but it’s not like it was five years ago, where they would pick up and leave because they found a better job, because there is not a better job out there.”
Workers who leave La Plata County in search of a better job may not have much luck in the rest of the state, said Alex Hall, chief economist with the Colorado Department of Labor and Employment.
Even with a declining labor force, a larger percentage of the county’s population is employed compared with Colorado and the nation. About 55 percent of La Plata County’s population is employed versus 49 percent of Colorado’s population and 45 percent of the national population.
People leaving the county to search for work elsewhere “aren’t finding better economic opportunities,” Hall said.
But not everyone who can’t find a job in La Plata County is leaving, Zalneraitis said. The shrinking labor force is also caused by people dropping out of the labor force for one reason or another, but continuing to live in the county. It may be an adult in a two-person household who find they can live on one income or Baby Boomers who decide they can live on their savings and abandon looking for another job, Hall said.
The growing number of long-term unemployed residents could also be problematic as the local economy begins growing again, Zalneraitis said.
“If you haven’t worked in a while, it is very difficult to reintegrate,” he said. Those workers may have a steeper learning curve and find it harder to resume at a salary and experience level at which they previously were, he said.
So what will kickstart La Plata County’s economy, create jobs and get the labor force growing again?
Gary Horvath, a Broomfield-based economist with the Colorado-based Business and Economic Research firm, had a few suggestions after studying La Plata County’s data. Increased enrollment at Fort Lewis College, the return of extractive industries and improvement in construction and housing will all help get the economy back in gear, he said. It also will help to increase tourism opportunities in the area and convince retirees to spend more of their time in Durango.
It’s all part of a bigger picture that goes beyond just unemployment numbers, Horvath said.
“The unemployment number is a number that gets a lot of attention, but it probably doesn’t deserve the attention it gets because there are so many other factors,” Horvath said. “The fact that unemployment is going down is one thing, but it is also important to look at labor force, the number of people who are underemployed, the types of industries people are working in and growth opportunities.”
It’s a number that shouldn’t be taken “at face value,” Hall said.