Six years into an economic recovery, far too many Colorado families are still being left behind.
Unlike other measures of economic health such as unemployment, poverty rates have been much slower to respond to the economic recovery. Economic insecurity and poverty remain more pervasive than would be suggested by the high-level headlines about how the state economy is performing.
Wage stagnation coupled with rising costs, growing income inequality and eroding labor standards all contribute to persistently high rates of poverty and economic insecurity in the state.
Recently, the Colorado Center on Law and Policy published the State of Working Colorado 2015-16, a collection of critical data designed to look beyond broad-based economic indicators to better understand how the economy is working for all Coloradans across the income spectrum. Among the poverty-related findings in this year’s report:
- The state’s poverty rate dropped to 12 percent in 2014, finally falling to a level not seen since 2007, but still significantly higher than the 2000 rate of 8.7 percent.
- A full 46 percent of Coloradans in poverty are living in deep poverty — that is, living on an income that is half of the poverty line. In 2014, that meant $5,835 per year for an individual and $9,895 for a family of three. And the number of people living in deep poverty increased by nearly 27,200 between 2007 and 2014.
- Although the federal poverty level (FPL) is the most commonly used official metric of economic need, many regard it as an underestimate of those who struggle to make ends meet. The Self-Sufficiency Standard for Colorado — the level at which families can meet basic needs without public or private support — generally requires an income at least 200 percent of FPL or even higher in some parts of the state. By this measure, the share of Coloradans without basic economic security was 29 percent in 2014 or nearly one in three households in the state.
- Poverty rates vary widely by race and ethnicity. The poverty rate among white, non-Hispanics in Colorado is 8.7 percent — lower than the statewide poverty rate of 12 percent and several times lower than the rate among Latinos (21.4 percent), blacks (19.5 percent) and American Indian/Alaskan Natives (20.6 percent). The poverty rate among Asian households is 9.3 percent.
- Even more striking is the share of people of color living at or near poverty (under 200 percent of the federal poverty level): 46 percent of all Latinos in Colorado live at or near poverty; 42 percent of black Coloradans; 24 percent of Asians; and 45 percent of American Indian/Alaskan Natives.
- Poverty is not distributed evenly across the state — some neighborhoods and some communities have higher than average poverty rates. Black and Latino Coloradans are substantially more likely to live in high poverty neighborhoods. While 15 percent of whites live in communities with a poverty rate of 20 percent or more, 42 percent of blacks, and 40 percent of Latinos live in such neighborhoods.
- Single mothers with children account for 10.7 percent of families in Colorado, but are 42 percent of all families in poverty.
- The child poverty rate of 15.4 percent in 2014 has finally fallen slightly below the 2007 rate (16.3 percent) but still remains significantly higher than the 2000 rate (9.7 percent). The percentage of children living at or near poverty (living in households earning less than 200 percent of FPL) jumps to nearly 37 percent.
- Latino and black children are considerably more likely to live in poverty compared to white and Asian children in Colorado. In 2014, 8.5 percent of white and 6.2 percent of Asian children lived in households with income under the poverty line. Latino children had the highest child poverty rate (28 percent) followed closely by black children (27 percent).
Improving these dismal numbers is admittedly a daunting task, but good policy could help break the cycle of poverty that afflicts far too many Coloradans. Stagnant wages for the vast majority of Coloradans over the last 15 years is the primary reason for persistently high poverty rates. Low-wage workers, in particular, are working longer hours, are more educated and have contributed to rising productivity in the state but have not seen in an increase in their hourly wages. To address poverty head-on, we must raise wages.
For example, updating the minimum wage would lift the standard of living of many low-wage workers in Colorado—most of whom are adult women and people of color. Erosion of the minimum wage explains about two-thirds of the growing gap between low and middle wage workers. The Colorado economy needs broadly shared prosperity that lifts the living standards of workers across the income spectrum in order to continue to grow.
Other policies that will move the needle in the right direction include expanding access to skills training in growing industries for those who have been out of work, targeting resources at communities still facing high unemployment, making child care available for single parents so they can attend school, and modernizing labor standards by providing earned sick leave and paid family leave.
Finally, we should invest public money into affordable housing so that rent-burdened low-income households are able to pay rent and provide for their families.
With the 2016 legislative session fast approaching, we hope the State of Working Colorado 2015-16 will spur a dialogue between workers, employers, policymakers and lawmakers that will inspire polices and ideas that will help Colorado’s neediest families achieve greater economic security.
– Michelle Webster