Nov 24, 2015

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Let’s build an economy that works for everyone

by | Nov 24, 2015

What should an economic recovery look like in Colorado? Is it a period of prosperity during which everyone in the state has a chance to work, build their economic security and provide for their families’ needs? Or is it a time when peoples’ wages stagnate, Coloradans struggle to make ends meet and only those in the very highest salary tiers benefit financially?

I’d like to think that any reasonable person would say the former, but the latter scenario represents how Colorado’s economy has played out during the past five years, according to findings from the State of Working Colorado 2015-16 report. Yet, economists are calling the past five years an economic recovery.

Published annually by the Colorado Center on Law and Policy, the State of Working Colorado is a collection of critical data designed to look beyond broad-based indicators to better understand how the economy is working for Coloradans across the economic spectrum.

The report acknowledges that Colorado’s economy has been expanding by a number of measures since 2009. In short, unemployment is way down and productivity is way up. While that should be a cause of celebration for Coloradans, those metrics only tell part of the story. Whether or not we’re in recovery mode, the fact remains that a vast majority of Colorado workers simply have not enjoyed broadly shared prosperity from the so-called economic expansion.

Among the report’s findings:

  • Job growth in Colorado lags population growth and is concentrated in low-wage jobs. While it’s true that the unemployment rate has declined, most of the job growth in Colorado has occurred in occupations that pay below the self-sufficiency standard required to cover basic needs such as housing, transportation, childcare, insurance and taxes. Also, to keep pace with its rapid population growth, Colorado needs to create 140,600 additional jobs.
  • Despite low unemployment, there are still significant signs of slack in the labor market. In 2014, 81 percent of the prime working-age population in Colorado was employed – still nearly 3 percentage points lower than the pre-recession high. Meanwhile, even amid a recovering economy, too many workers are still “settling” for part-time jobs that don’t provide sufficient pay or benefits.
  • Wages continue to stagnate for most Colorado workers as productivity rises. Apart from those on the upper end of the salary curve, very few Coloradans are really feeling the economic recovery that officially began five years ago. In fact, the report shows that Coloradans are essentially working more for less. Productivity has grown by nearly 30 percent in Colorado since 2000 while the median wage has stalled over the same period of time.
  • People of color and women still experience huge disparities in terms of opportunity and pay. The white median household income in Colorado was $67,360 compared with the Latino median income of $44,174 and the black median income of $41,743. Meanwhile, women earn less than men at every educational level, and the gap widens as education level increases. Colorado women age 25 and older earned only about 79.6 percent of men’s median income. Assuming progress continues the disparity in earnings between men and women in Colorado will not close until 2057.

In a nutshell, this report reveals alarming and widening disparities along ethnic, cultural, social and gender lines – signifying a growing crisis of income inequality that must be fixed if the economic recovery is to be real, meaningful and enduring.

If there’s a silver lining in this report, it’s that good policy could help break the cycle of wage stagnation that endangers the long-term prosperity and wellbeing of Colorado. Raising the minimum wage in Colorado (or letting municipalities set their own minimum wage) would be one step in the right direction. But that would not address the changed composition of the job market. We should expand skills training for those who have been out of work for long periods of time, target resources at the most challenged population, and make sure child care is available for single parents so they attend school. We should also invest public money into affordable housing so that the large number of rent-burdened low-income households are able to pay rent and provide for their families. Outside of state level policies, larger changes in our economy are needed so that workers are able to realize some of the wealth being created by increases in their productivity.

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. Ultimately, we want to inspire polices and ideas that bridge the gaps in the economy and help working families achieve the economic security their hard work has earned.

– Claire Levy

Recent articles

CCLP’s 2024 legislative wrap-up, part 2

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs. Part 2/2.

CCLP’s 2024 legislative wrap-up, part 1

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs.

CCLP testifies in support of Clean Slate updates

Bethany Pray, CCLP’s Chief Legal and Policy Officer, provided testimony in support of House Bill 24-1133, Criminal Record Sealing & Expungement Changes. CCLP is in support of HB24-1133, as it is one of our priority bills.

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.