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News

Dec 9, 2015

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Coloradans still fare poorly in poverty measures

by | Dec 9, 2015

Research and Policy Analysis

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

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Recent articles

CCLP testifies in support of TANF grant rule change

Apr 15, 2024

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

CCLP’s legislative watch for April 5, 2024

Apr 5, 2024

For the 2024 legislative session, CCLP is keeping its eye on bills focused on expanding access to justice, removing administrative burden, preserving affordable communities, advocating for progressive tax and wage policies, and reducing health care costs.

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.