For every two employees who joined Colorado payrolls between early 2000 and 2005, more than one employer was added, according to U.S. Census Bureau numbers released Thursday.
That figure attests both to the difficult job market the state endured during that period and the strong entrepreneurial impulse of Coloradans.
“A lot of people who get laid off during a recessionary period do not necessarily go on unemployment-insurance benefits. They start their own businesses,” said Joseph Winter, a senior labor economist with the Colorado Department of Labor and Employment.
Between the first quarters of 2000 and 2005, many things changed in the state. The technology and telecom sectors peaked, followed by a sharp downturn that cost tens of thousands of high-paying jobs, followed in turn by a recovery starting in 2004.
Payroll employment, which doesn’t include the self-employed, rose 1.2 percent during the period, far below the 6.1 percent increase in the state’s population between 2000 and 2005, according to census counts.
By contrast, the number of establishments with employees grew by 9.8 percent during that same period.
Colorado employers averaged 13.9 workers in 2000 but only 12.8 in 2005. Looked at another way, 57.8 percent of establishments in the state had four or fewer workers in March 2000. By 2005, just shy of 60 percent did.
Hunt Lambert, now associate vice president of economic development at Colorado State University in Fort Collins, witnessed the transformation of several former employees into employers while serving as director of the school’s Center for Entrepreneurship.
He said highly skilled castoffs from technology and telecommunications tended to follow three tracks: Some took their severance packages and retired. Others took jobs elsewhere, often at lower pay, in areas that were hiring, such as real estate and mortgage brokering. A third group broke off and started their own businesses.
“In northern Colorado, you could find 250 companies headed by former Hewlett Packard employees,” Lambert said.
Like an earthquake reshaping a landscape, the downturn changed Colorado’s economy.
The once high-flying information industry, which consists primarily of software, telecommunications and media, crumbled. It shed 14.5 percent of its employees, 21.5 percent of its total payroll and 6.6 percent of its employers.
Manufacturing, already in decline, weakened further, and construction softened.
But other industries rose up. Driven by renewed oil and natural-gas production, mining was a big winner, boosting employee counts by 31 percent, total payroll by 82.1 percent and establishments by 8.8 percent.
The real-estate sector, now slumping, did well during the five-year period, adding 6.5 percent to its employee count, 35 percent to its wages paid and 26.4 percent to the number of establishments.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
