Charles serves as CCLP's Deputy Director of Research, using data and research to support our efforts to stand with diverse communities across Colorado in the fight against poverty. Staff page ›

Mar 21, 2022

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Overlooked and Undercounted shows 1 in 4 Colorado households struggling to get by

by | Mar 21, 2022

Last week Colorado Center on Law and Policy released the latest edition of our report Overlooked and Undercounted: Coloradans Struggling to Make Ends Meet in 2019. Using data from the U.S. Census Bureau, the new report, authored by Annie Kucklick of the University of Washington’s Center for Women’s Welfare, estimates that 7.4 percent of Colorado’s working age households[1] were below the official poverty measure in 2019.

However, there is widespread agreement among policy makers and academics that the federal poverty measure is no longer an accurate accounting of the true income families in Colorado require in order to meet their basic needs. As we discuss in this blog post and our recently released report, over 280,000 households in Colorado earn too much to be in poverty by the federal government’s criteria — and yet do not earn enough to cover their households necessary expenses.

The Self-Sufficiency Standard, developed by Dr. Diana Pearce, offers an alternative approach to estimating the extent of economic insecurity in Colorado. Unlike the official poverty measure,[2] the Self-Sufficiency Standard measures economic need by adding up the estimated monthly costs facing over 700 different family types in each of Colorado’s 64 counties.

Items included in the Self-Sufficiency Standard’s household budget include: housing, child care, food, transportation, health care, miscellaneous costs, and taxes (including tax credits such as the Earned Income Tax Credit if applicable).[3]

Using this expanded measure of economic insecurity, we estimate that 24.9 percent of working families in Colorado did not earn enough income in 2019 to cover their basic needs. This includes roughly 286,205 households who earned more than the official poverty measure but still did not have enough income to meet their household’s necessary monthly expenses.

Because eligibility for most federal government safety net programs is based on a household’s income relative to the poverty threshold (for example most adults are eligible for Colorado’s Medicaid program if their income is at or below 138 percent of the federal poverty limit), many of the households below the Standard likely earn too much income to qualify for public assistance programs yet would benefit from such assistance.

This and other findings related to Coloradans’ economic security can be found in the Colorado Center on Law and Policy’s (CCLP’s) recent report, Overlooked and Undercounted: Coloradans Struggling to Make Ends Meet in 2019.

This report is the first of two that CCLP will release in 2022 looking at the income needs of Colorado’s households. The second report, The Self-Sufficiency Standard for Colorado 2021 will be released later this year. Unlike Overlooked and Undercounted, the comprehensive Self-Sufficiency Standard report will include estimates of the income needed by households to meet their basic needs using data from 2021; in other words, using data that reflects changes in the cost of living (though not all) that have occurred since the start of the COVID-19 pandemic.

Due to data collection issues during the COVID-19 pandemic,[4] we were unable to use U.S. Census Bureau data from 2020 in our estimates of who was above and below the Self-Sufficiency Standard in Colorado. As a result, our estimates use 2019 data and reflect the state of our economy prior to the pandemic. However, as we look to return to “normal” following the disruptions of the past two years, we believe this report demonstrates why returning to normal is not enough.

Policy makers and working Coloradans must not accept that one in four households — 88.7% of whom included at least one employed adult — did not earn enough to meet Colorado’s high cost of living. We can, and must, do better to ensure all Coloradans can enjoy economic security.

Note: As we await the upcoming publication of the Self-Sufficiency Standard for Colorado 2021, CCLP will release a series of blogs highlighting findings from Overlooked and Undercounted that are most relevant to our work in our four focus areas (food, health, housing, and income) as well as our work to advance racial, gender, and class equity in Colorado. Stay tuned!

[1] Households with at least one member who is between 18 and 64 years old and has no work-limiting disability (as defined by the U.S. Census Bureau).

[2] The official poverty measure was developed in the 1960s. At its basics, the measure assumes that a household needs to earn income equivalent to three times the 1960s cost of a basic food diet. It is adjusted by family size but is the same for all states in the contiguous United States. The poverty measure for different family sizes is only updated to adjust for inflation. While offering a consistent yardstick for measuring poverty nearly six decades, even the U.S. Census Bureau acknowledges that the official poverty measure is no longer an accurate measure of poverty.

[3] Despite being more comprehensive than the official poverty measure, the Self-Sufficiency Standard does not capture all the expenses facing households. Costs for items such as internet (unless included in rent), debt payments, and retirement savings are not included in the Self-Sufficiency Standard’s income-need estimates. However, these and other costs facing low-income households are likely to affect a household’s ability to meet their income needs beyond what we’ve captured in the Self-Sufficiency Standard.

[4] See this working paper for more on the U.S. Census Bureau’s challenges collecting survey data during the COVID-19 pandemic https://www.census.gov/library/working-papers/2021/acs/2021_Rothbaum_01.html.

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