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Montezuma County Unemployment Claims Show Quick Drop In Layoffs, But Longer-Term Uncertainty

Austin Cope
The Colorado Workforce Center in Cortez.

As the COVID-19 pandemic and resulting shutdowns brought wide-ranging impacts to local economies across the state and nation, Montezuma County wasn't spared. Data from the Colorado Department of Labor and Employment shows layoffs in Montezuma County have decreased faster than in other parts of the state, but the economic impacts haven’t worn off yet. 

Although unemployment insurance is just one form of government assistance for people who have been hit by an economic downturn like the one associated with the pandemic, tracking the trends of how many people apply for this benefit — and when — is one way to determine impacts to a local economy.

According to data from the CDLE, Montezuma County saw a large spike in regular unemployment insurance claims in mid-March, as the virus was sweeping across the country. 

Credit Data via Colorado Department of Labor and Employment; Visualization Courtesy of Elana Cope

The number of initial applications for regular unemployment in the county rose to over 250 in one week at the end of March, up from 2019's average of just 15 per week.

But by mid-April, that number of claims had dropped to only around 30 or 40 per week, and it continued to decrease into May and June. The most recent data, for the end of June, shows the number of initial unemployment claims at just 25 per week.

Ryan Gedney, senior economist with the CDLE, said this trend means fewer people in Montezuma County are getting laid off from their jobs now than they were in March.

"At the end of March, Montezuma was following a trend similar to what we saw in Colorado in terms of claim activity," Gedney said. "And then, probably given Montezuma's industry mix, we saw a return to almost normal, probably quicker than we have seen in a lot of counties across the state." 

Gedney explains the county has about the same concentration in leisure and hospitality as elsewhere in Colorado but doesn't have elevated concentrations like some of the metro areas, or rural areas like Eagle and Summit counties, which contain ski towns like Vail and Breckenridge. They depend almost exclusively on leisure and hospitality to sustain their economies. The decrease in travel and closures of restaurants had a steep impact on unemployment.

Although there are fewer layoffs in Montezuma County currently than in March, the people who became unemployed after the pandemic began don’t seem to be returning to work yet. That trend can be seen in the number of applications for continued unemployment benefits. Such claims also rapidly increased in March, but they have stayed relatively level since then. Between March and June, they dropped from around 700 per week to approximately 600.

Credit Data via Colorado Department of Labor and Employment; Visualization Courtesy of Elana Cope

"[That] shows that people either aren’t being rehired, or they're unable to find suitable unemployment in their area," Gedney said.

That percentage is less than in the rest of the state. While Montezuma County’s average number of weekly continued unemployment claims at the end of June was about four times as high as its 2019 average, the state of Colorado's average was around 13 times as high as 2019. That means compared to the state as a whole, the proportion of people who remain unemployed in Montezuma County is lower.

However, the number of people who are obtaining regular unemployment insurance is just one way to measure the overall health of the economy. It is different from the unemployment rate, which measures the total number of people out of work, not only the ones receiving benefits.

Gedney said a large percentage of people who are currently unemployed are also receiving some kind of government assistance.

In general, the main impact of layoffs and unemployment on local economies is that people have less cash to spend, according to Gedney. Regular unemployment benefits only cover about 30 to 40% of a person’s salary. Extra federal funds have brought this number closer to normal for most people, but that funding has expired. Unless Congress reaches a deal to continue federal assistance, many families’ cash on hand will likely decrease.

And, as the virus continues to run its course, Gedney said the course of unemployment trends is also hard to determine.

"Frankly, with this data, I’m playing it week by week, month by month, as we look at what claims activity [looks] like, what … efforts to mitigate the spread of the virus look like," he said.

Closures, stay-at-home orders, the ability for an area to reopen and contain the spread of COVID-19, and consumer demand are primary drivers in determining both short- and long-term layoff trends, Gedney explained.

"It’s still a long way to go, and … really, any kind of recovery will be tied to how the pandemic is handled," he said.

Austin Cope is a former Morning Edition host for KSJD and now produces work on a freelance basis for the station. He grew up in Cortez and hosted a show on KSJD when he was 10 years old. After graduating from Montezuma-Cortez High School in 2010, he lived in Belgium, Ohio, Spain, northern Wyoming, and Himachal Pradesh, India before returning to the Cortez area. He has a degree in Politics from Oberlin College in Ohio.