Unemployment numbers complex

by William T. Beverly, Ph.D.
WALSENBURG — At close of business for October 2011, the unemployment rate for Huerfano County was 10.1%, slightly higher than September’s 9.7%; but lower than October 2010’s 11.8%. Colorado as a whole also improved over last year with a 7.7% versus 8.4% for October 2010.
While this appears to be good news, it is unclear how much these numbers are impacted by unemployed persons simply running out of benefits or not any longer being included in the officially tabulated unemployment data.
“Some positive trends are beginning to emerge on the Colorado jobs front,” said Ellen Golombek, Executive Director of the Colorado Department of Labor and Employment. “While we still have a ways to go to recover all of the jobs lost due to the Great Recession, job creation today is stronger than it was a year ago. We’ve added over 30,000 jobs since the beginning of 2011.”
Unfortunately however, Huerfano County still lags near the bottom of the unemployment pit along with Costilla (10.9%), Dolores (11.8%), and Lake County (10.4%). The sad change here is that while Huerfano is often among the top five most unemployed counties in Colorado, this month, it is among the top four.
According to several state departments of labor and employment, the misuse of independent contractor status among some employers contributes to high unemployment rates. When employers hire workers as independent contractors instead of fulltime employees, they generally do not pay taxes or benefits. The independent contractor will not appear in employment statistics and may even be collecting unemployment benefits while working.
“Misclassification costs everyone,” says Golombek. “It destabilizes the business climate by causing responsible businesses to suffer unfair competition. The efforts we will be launching with the U.S. Department of Labor will promote accountability that Colorado employers and employees will welcome.”
According to the Colorado Department of Labor and Employment, “Employee misclassification is a growing problem in our economy. In 2010, the Wage and Hour Division collected nearly $4 million in back wages for minimum wage and overtime violations that were a result of the employees being misclassified as independent contractors or otherwise not treated as employees.” This is an increase of almost 400 percent from FY 2008, when the division found just over $1.3 million owed for the same reason. More information is available on the Department’s misclassification web page at http://www.dol.gov/misclassification/.