Colorado Labor Force Hits Lowest Participation Since 1979

Will your paycheck cover the same bills it did two years ago? The answer, according to the latest state data, is getting harder to find.

Colorado’s labor force participation rate hit 65.2% in September. That is the lowest point since 1979.

The state lost 3,050 workers in a single month. The Department of Labor and Employment reported the drop on Friday. Tim Wonhof, the state’s labor market information director, confirmed the numbers in an email to the Colorado Sun. He noted that while the trend mirrors a national decline, Colorado still ranks ninth in the nation for participation.

Do not let that ranking comfort you. Rank is relative. The sheer volume of people leaving the workforce matters more to your local grocery store or hardware supply chain than a top-ten spot.

The labor force now stands at about 3.18 million people. That is a drop of 75,000 from a year ago. The peak was October 2024. At that time, the labor force was roughly 95,000 larger. Participation sat at 67.8%.

Why are people leaving? Wonhof points to two drivers: a rapidly aging population and declining net migration. He stated that unlike previous recession-driven declines, this shift is demographic. Fewer people are moving to Colorado. Those who stay are working past age 65.

But is that the whole story? Not necessarily. Bill Craighead, an economist and program director at the UCCS Economic Forum in Colorado Springs, warned against assuming age is the sole culprit. He wrote that state data lacks specific participation rates for those aged 25 to 54. It also lacks the national measure of "discouraged workers."

Craighead’s point is critical. We do not know how many people are retiring by choice versus how many have given up on finding work. That distinction changes the economic outlook entirely.

The unemployment rate rose by one-tenth of a point to 4.1% in September. Nationwide, it hit 4.2%. The state tracks involuntary part-time workers — those working fewer hours than they want. That figure averages 2.6% so far this year. It is down from 3.3% in 2025 and well below the 5.8% seen in 2020.

Read that again. The involuntary part-time rate is improving, yet the total labor force is shrinking at a historic pace. Those two facts do not fit neatly into one narrative.

Wonhof called the demographic evolution a "unique challenge." That is bureaucratic language for a problem that hits local businesses hard. When the pool of available workers shrinks, wages rise or vacancies stay open. For neighbors in the valley, this means fewer job openings and higher costs for services that rely on low-wage labor.

The state’s workforce is getting older, but the data does not tell us if that is a retirement wave or a resignation. Craighead noted it feels steeper this year, but without granular age-specific state data, we are guessing.

The numbers do not lie about the direction. They only leave the cause ambiguous.