There is a story in the Denver Post this morning about the prospect of new jobs in Colorado. The term used is jobless recovery. I’m no economist, but I know that until my neighbors have jobs we won’t believe the economy is recovering. Someone who actually is an economist is predicting that Colorado won’t see the same levels of employment that we enjoyed in 2007 until 2014 in a best case scenario, and never in a worst case scenario.
The factors that are keeping employment rates down are some segments of the economy are in decline and may never rebound to pre-2007 levels, i.e. finance and construction. People who used to work for financial or construction companies need to retrain, because their industries may never again reach pre-2007 levels.
The financial industry is facing increasing losses on commercial real estate loans. Because of how troubled assets are treated both by banks and their regulators, they have little or no capital to lend. Small businesses are being hit hard. They can’t get the financing they need, either for day to day operations or for any kind of equipment or asset purchase. Traditionally small businesses create 2/3 of all new jobs in the US. With small businesses starved for cash, they won’t be creating any new jobs.
Government has to break the logjam by getting cash to small businesses. Colorado’s government is struggling for its own solvency, making that an unlikely source of capital for community banks and small businesses. Currently the state is supporting small banks with a CD program that allows community banks access to cash for loans to farmers and other small businesses. However, the state also deposits unemployment benefits for some unemployed workers in banks not located in Colorado. That money should be brought home. It is just common sense--neighbor helping neighbor is the way of the west.
Homework:
http://www.denverpost.com/business/ci_14482457
http://www.msnbc.msn.com/id/4142727/
http://www.sba.gov/advo/stats/sbfaq.pdf
http://www.colorado.gov/cs/Satellite/Treasury/TR/1190277266733
http://www.colorado.gov/cs/Satellite/CDLE-UnempBenefits/CDLE/1248095315498
The factors that are keeping employment rates down are some segments of the economy are in decline and may never rebound to pre-2007 levels, i.e. finance and construction. People who used to work for financial or construction companies need to retrain, because their industries may never again reach pre-2007 levels.
The financial industry is facing increasing losses on commercial real estate loans. Because of how troubled assets are treated both by banks and their regulators, they have little or no capital to lend. Small businesses are being hit hard. They can’t get the financing they need, either for day to day operations or for any kind of equipment or asset purchase. Traditionally small businesses create 2/3 of all new jobs in the US. With small businesses starved for cash, they won’t be creating any new jobs.
Government has to break the logjam by getting cash to small businesses. Colorado’s government is struggling for its own solvency, making that an unlikely source of capital for community banks and small businesses. Currently the state is supporting small banks with a CD program that allows community banks access to cash for loans to farmers and other small businesses. However, the state also deposits unemployment benefits for some unemployed workers in banks not located in Colorado. That money should be brought home. It is just common sense--neighbor helping neighbor is the way of the west.
Homework:
http://www.denverpost.com/business/ci_14482457
http://www.msnbc.msn.com/id/4142727/
http://www.sba.gov/advo/stats/sbfaq.pdf
http://www.colorado.gov/cs/Satellite/Treasury/TR/1190277266733
http://www.colorado.gov/cs/Satellite/CDLE-UnempBenefits/CDLE/1248095315498
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