The confluence of a dwindling labor force and high demand for goods and services are “overheating” the economy, a burn felt at the national, state, and local level.
“Where I’m talking about overheating, we have more demand in the economy than the economy is able to meet the consequence of rising prices,” said Greg Sobetski, chief economist with the Colorado Legislative Council. “We still have high levels of household savings and the ability to consume, particularly among folks who are disproportionately likely to spend money in resort communities like Aspen.”
But as any local business owner or employer will attest, the struggle to house, hire, and retain workers in the resort communities makes it challenging for businesses to meet that demand.
At a Business Outlook Forum hosted by the Aspen Chamber Resort Association on Wednesday, local business leaders and local policymakers gathered to hear the latest on labor and real estate from state, regional, and local leaders.
As of February, the Pitkin County unemployment rate clocked in at 2.9% with about two available jobs for each unemployed person, according to Carolyn Tucker, a regional business coordinator with the Colorado Department of Labor and Employment.
Across the state, the greatest gains in jobs added back were in accommodation and food services as well as leisure and hospitality, according to data from the U.S. Bureau of Labor Statistics.
Sobetski said this is likely due to how many jobs in those sectors were lost in the pandemic – when unemployment topped 23% – and the nature of rural resort economies.
Aspen Tech Labs also tracked job postings in the Roaring Fork Valley and in Aspen. In the past few weeks, available jobs are trending back upward after a dip in February.
Health-care and nursing jobs accounted for the greatest number of job postings, followed by food service; but job postings are not always equal to an actual number of open positions or job vacancies.
“For example, we have a number of PRN, or as-needed, positions posted where we are looking for someone to help during vacations or employee medical leaves and are not filling a ‘vacated’ position,” Stacey Gavrell of Valley View Hospital said in an email to The Times.
She also noted that Valley View Hospital has been fortunate enough to keep patient care uninterrupted because of staffing concerns due to a dedicated staff. The largest challenge the hospital sees in recruiting and retaining talent is housing, she said.
The rising price of housing is what is excluding so many workers — particularly young workers — out of the job market in rural resort areas like Aspen, Pitkin County, and the region.
To match inflation, workers would have needed to see at least an 8% increase to match the rising price of commodities, according to Sobetski.
“What’s driving costs is overwhelmingly the shelter component of inflation, which is tied to rent,” he said. “And so this is an environment where landlords, others who are purveyors of rental property, are choosing to increase rents in order to cover their rising costs elsewhere in the economy and resulting in higher shelter pressure.”
The Federal Reserve relies on raising interest rates to cool an “overheating” economy, but that mitigation method does not as easily target the shelter component of inflation.
Who’s going to take the shifts?
Tucker noted that complaints lobbed against a younger workforce go back generations.
But this time around, the critique that “no one wants to work” does not hold water because there are fewer workers to be had.
“The workforce is just so different now that (older workers) can retire, decreased birth rates, aging population in Colorado; we are not attracting that young ski bum as I (was) anymore,” she said. “There’s much more competition across the nation for other places to live that are cheaper and have different types of things to do.”
In Pitkin County, the Baby Boomers and Generation X outnumber the youngest generations of working age people, signaling that a labor market without a sufficient number of laborers is bound to continue.
“I think this is the new normal. I don’t think that there’s some glut of workers sitting out there waiting to come back into the labor force. I think we’ve stabilized now,” Sobetski said. “And honestly, I think the biggest change in the economy over the next 10 to 20 years is that the story of the U.S. economy will be one of labor shortages.”
This relationship between high demand and low labor force supply, he and Tucker asserted, is directly tied to high cost of living — with Pitkin County at 127% cost of living index.
Lex Tarumianz is a broker associate with Aspen Snowmass Sotheby’s International Realty. While discussing the climbing price and scarce availability of commercial real estate in the Aspen core, he noted the regional moves of businesses in the valley.
“What we’re really seeing is the trend that employers are starting to move downvalley to accommodate their staff, with most of the workforce coming from Carbondale, Glenwood, and that general vicinity,” he said.
More affordable real estate and a shorter commute for employees appeals to business owners.
Diane Foster, assistant Aspen city manager, connected the effort to attract and retain workers to transportation with the city’s decades-long effort on the Entrance to Aspen project and the Castle Creek Bridge.
“There are so many barriers to employees coming to Aspen,” she said. “There are wonderful jobs now in Willits, Carbondale, and Glenwood, and they are wage competitive. And so making (transportation) possible is an economic issue, as you all know.”
Still, Tucker is optimistic local businesses can attract quality talent by being flexible with qualifications, offering more training, and expanding benefit packages.
Shortening recruitment timelines can factor into hiring new staff quickly, too, she said.
“As you work up the (graph), your motivators, you can actually affect that when you’re developing your recruitment and retention strategies and your training programs,” she said.
By: Josie Taris | The Aspen Times \ April 20, 2023