Colorado’s overall economy is strong and unemployment is low, so why are there still so many workers struggling to earn a livable wage?
Anyone who lives in Denver knows that rising housing costs is a huge concern, especially for low-income families. But this is only part of the problem.
Wage stagnation is the other piece of the puzzle.
The median wage in Colorado has been falling or flat since the recovery began in 2009. In fact, in 2016 median earnings for workers in the state were two percent less than what they earned in 2000, when adjusted for inflation.1
This is exacerbated by the fact that a growing share of Colorado jobs pay less than the self-sufficiency rate. While job growth in the state has been strong, it has been fueled in large part by an increase in service industry jobs that pay lower wages. Jobs that used to offer economic security no longer do so because wages have lost ground to the rising cost of living in the state. In 2016, 20.5% of jobs in Colorado paid less than the self-sufficiency wage for single adults, up from 9.4% in 2001.1
Most entry-level, lower-skilled positions pay at or near minimum wage. Through Mi Casa Resource Center’s Career Development program, we work to connect low-income job-seekers not only with better-paying jobs, but also with jobs in growth industries that offer opportunities for professional advancement. In 2017, graduates from our Career Development program were able to secure employment at $13.46/hour, which is 45% more than minimum wage ($9.30/hour). Furthermore, 80% of our graduates receive an average wage increase of $4/hour during the first twelve months of employment. Over a one-year period, that increase translates to $10,000 of additional income!
However, despite greatly increasing the wages of our participants, there is still a gap. In Denver, the hourly self-sufficiency wage for an adult with two children is $27.18.2 This means that Mi Casa graduates, many of whom are single parents with dependent children, are earning an average of 50% of the self-sufficiency wage.
This means that even full-time workers with jobs that pay above minimum wage often need to rely on government assistance. At the same time, we are seeing new requirements being put on government benefit programs and drastic cuts to the social safety net. So, low-income families are increasingly turning to nonprofit organizations like Mi Casa for support.
However, nonprofit organizations can only fill the gap for so long. If we, as a community, want to have a long-term impact on the economic security of low-income families, there needs to be systemic changes to address wage stagnation.
For more on the topic of wage stagnation, check out this story from Public Radio International, which includes an interview with Andrea Stiles Pullas, Director of Mi Casa’s Career Development program.