Guide to Economic Mobility in Colorado - The Bell Policy Center
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Guide to
Economic Mobility
in Colorado
The Bell
Policy CenterContents
Education - page 22
Early Childhood - page 22
Postsecondary & Training - page 26 Health - page 37
Demographics - page 5
Colorado’s Economy - page 9
Public Investments - page 16
Automation - page 19
Work Policies - page 50
Making Pay Work - 50 Building Assets - page 42
Making Work Pay - 55
Rejoining the Workforce - 66
Retirement Ready - 68 Housing - page 45
2Introduction
The Bell Policy Center is pleased to release our Guide to Economic Mobility in Colorado.
We hope it offers a comprehensive look at the barriers and opportunities communities
face as we work to ensure economic mobility for every Coloradan.
After a year of conversations across the state and intensive research, it’s clear to us that
despite Colorado’s overarching economic growth, too many Coloradans are not feeling
the benefits of our state’s exceptional prosperity. Many of our fellow citizens feel stuck and
see the American Dream as elusive. Even still, there is pride in and optimism about the
Colorado way of life.
This guide explores how the forces of shifting demographics, economic inequality,
shrinking public investments, and technological change make economic mobility a steep
uphill climb. Despite the challenges these forces present, we continue to believe
successful use of policy levers in areas like education, health, housing, and labor and
employment law can make that climb easier. Throughout this guide, we take measure of
how we use those levers and offer ideas for how we can do better.
Our hope is the information, analysis, and recommendations offered here fuel a robust
conversation about economic mobility in Colorado. We recognize there will be diverse
perspectives on this information and welcome an open dialogue to discuss them.
The Bell Policy Center believes it’s within our power to raise the economic floor, build a
diverse and thriving middle class, and embrace innovation in Colorado. To do that, we
need the facts and ideas for how to change our trajectory. We’re confident this guide
provides just that.
3Guide to Mobility: Key Takeaways
Forces
Colorado is growing older and more diverse. and the state’s for-profit students face even
Notably, Hispanics will comprise one-third of higher average debt than other students.
Colorado’s population by 2050, but will make
up more than 60 percent of new entrants to Combined two-generation approaches to
the workforce by that time. This underscores early childhood and postsecondary challenges
the importance of closing equity gaps today. show enormous potential for cost-effective
ways to improve outcomes.
Colorado’s overall economic recovery stands
out, but gains have been uneven throughout A historic number of Coloradans now have
the state. Distressed communities persist both health insurance — at 6.5 percent, Colorado’s
in rural and metro areas and Colorado is uninsured rate is down significantly from the
adding more low-wage jobs than any other. 18 percent it was 10 years ago, but crucial
When adjusted for inflation, average weekly pressure points still exist. A new study of 23
wages have only risen $33 since 2000. states finds Coloradans spend the most on
out-of-pocket costs.
Colorado families are hit particularly hard by
the impact of low investment in public Lack of affordable housing is a top concern for
programs. At 3.7 percent, Colorado is investing Coloradans. A household must make $21.97 to
a historically low percentage of its economy in afford rent and utilities in Colorado, but the
services funded through the state’s General average renter wage is only $17.13. Nearly half of
Fund. all Colorado renters are cost burdened, with an
additional 24 percent severely cost burdened.
As automation puts Colorado at a critical
juncture over the next two decades, 477,000 In the workplace, updating wage, benefits,
Colorado workers are likely to be affected by and worker protection practices would have
changes in technology. Most of these are positive implications for our state. Gender pay
workers in low-skill, low-wage jobs. equity could mean the state’s poverty rate
from 5.6 percent to 2.8 percent. Implementing
Levers the Obama administration’s proposed
overtime eligibility changes would benefit
High-quality early childhood education has 248,000 salaried Coloradans, especially female,
become cost prohibitive for many families. The black, and Hispanic workers.
Colorado Preschool Program (CPP), which was
designed to subsidize costs for low-income Child care poses a huge challenge for working
families, is only serving 20 percent of Colorado’s parents, as 64 percent of Colorado children
3- and 4-year-olds. under the age of six live in a home where all
primary caregivers work, but Colorado’s Child
Our changing workforce necessitates greater Care Assistance Program (CCCAP) only serves
attention to postsecondary education. More 13 percent of eligible families.
must be done to further educate the 9 percent
of Coloradans who haven’t completed a high Colorado risks future public funding liabilities if
school diploma or its equivalent, but we also it doesn’t address the high costs of long-term
need new approaches to meet the needs of care, the lack of options to save for this
the more than 30 percent of undergraduates expense, and retirement savings in the state.
aged 25 and older in our postsecondary system Care for seniors is among the biggest cost
in an affordable way. Colorado’s outstanding drivers in Medicaid and is projected to grow,
student loan debt now totals $24.75 billion, and half of Coloradans don’t have access to
retirement plans at work.
4Forces
As many fight to enter or remain in today’s shrinking middle class, the road to opportunity is
littered with hurdles hardworking Americans are expected to clear with varying levels of
assistance. These are exacerbated by what the the Bell Policy Center identifies as “forces.”
This guide provides insight on some of the specific forces impeding Coloradans’ ability to get
ahead and stay ahead. The examination of these forces offers the necessary lens to
understand where we are and how we got here, but also sheds light on the unfair challenges
Coloradans face due to outdated practices that can be solved with progressive and inclusive
policymaking.
Demographics:
A Changing Colorado
Colorado’s changing demographics have Between 2010 and 2015, Colorado’s population
far-reaching implications for our state’s grew by about 400,000, almost all of whom
economic growth. A key indicator in settled along the Front Range. Although the
determining prosperity and need across the rate of net in-migration slowed in 2016, another
state, demographics help us understand 460,000 people are expected in Colorado by
demands for housing, transportation, schools, 2020, most of them headed to the Front
and other public services. Because Range.
demographics affect so much of how Colorado
operates, it’s imperative to recognize how Expected Population Growth
Expected Population Growth
these elements play into the vision of
economic opportunity.
500,000
459,143
450,000
398,120 399,951
387,140
Population Growth
400,000
Number of Coloradans
350,000
300,000
Overall, Colorado is growing faster than most
271,823
246,376
250,000
states — it was the eighth fastest state in 200,000
absolute population growth in 2016 — but our
150,000
population is increasing more slowly than it
100,000
has in the past. In recent years, Colorado has 59,191
50,000
seen a 1.6 percent annual uptick in population, 10,980
nearly half the 3 percent annual growth in the
0
Colorado Front Range Denver Metro Non-Front Range
1990s. Still, Colorado’s population is projected
to grow from 5.6 million people in 2017 to 8.7 2010-2015 2015-2020
Source: Colorado Demography Office, Population Estimates 2010-2015, 2015-2020
million in 2050, driven overwhelmingly by
newcomers moving to the state.
5Front Range Population Growing, Rural Shrinking
Percent Population Change in Colorado Counties with Largest Population Losses and Gains
Larimer Weld Phillips
Moffat
Jackson 10.7% 11.9% -3.5%
-6.7%
-2.5%
Grand Boulder Broomfield
Rio Blanco -1.3% 7.8% 15.2%
-1.3% Adams
10.4%
Denver Arapahoe 9.4%
12.5%
Kit Carson
Jefferson Douglas -0.6%
5.4% 12.2%
Teller Cheyenne
Delta El Paso
0% -0.2%
-3% 7.8%
Montrose
Fremont Kiowa
-1%
-0.4% Crowley -0.2%
-4.6%
Saguache
Hinsdale -0.8% Bent Prowers
-9% Otero -10.1% -5%
Dolores -3%
-4.3% Huerfano
Rio Grande -3%
-4.9%
Baca
Las Animas
-5.3%
-8.7%
Conejos
-2.5%
Source: Colorado Demography Office, Colorado Population Estimates by County, 2010-2016
Counties with population loss Counties with population gain No data
Outside of the Front Range, the population in While stagnant and declining areas have fewer
25 counties declined between 2010 and 2015. jobs and economic opportunities, they often
With more people moving out than in and have lower living costs and are less crowded,
deaths outnumbering births, these counties which can be enticing and spur growth. Since
will struggle to sustain their population over Colorado has several communities that are
the long run. growing while others are declining, helping the
latter prosper from statewide growth is
Growing and declining populations both have important to promoting economic
attributes that may encourage or discourage opportunities throughout Colorado.
economic growth. Growing areas spin off lots
of economic opportunities that attract people, One of the critical resources needed to
which means greater demand for housing, generate growth in rural parts of Colorado is
transportation, and other resources. If supply broadband internet access. While many rural
does not or cannot keep pace, these areas towns located along major highways have
become congested, expensive, and less broadband access, almost one-quarter of rural
attractive. residents don’t, including many living in large
portions of the Eastern Plains and mountains.
The lack of high-speed internet affects how
6schools, hospitals, and businesses operate and Four out of every 10 workers in Colorado are
can make a difference in an area’s growth. The baby boomers and as they retire, our workforce
Bell met with members from several Colorado will undergo a major transformation.
communities during the summer of 2017, and
those on the Western Slope and in Approximately 1 million workers are projected
northwestern Colorado shared the importance to age out of the workforce by 2030, with most
of broadband access. The Governor’s Office of expected to leave between 2020 and 2030.
Information Technology is leading the efforts Education, health, utilities, mining, and
to increase coverage and capacity of government are industries with a larger
broadband throughout Colorado, including number of older workers and will rely on
mapping the availability of service and replacing retiring workers; this will open the
pursuing strategies to expand access. Ensuring door for new workers to find their place in
all parts of Colorado have access to broadband Colorado’s workforce.
is one strategy to help all communities benefit
from Colorado’s economic growth. In addition, senior spending on health care
and other services is projected to drive an
Colorado Is Getting Older almost 70 percent increase in jobs such as
personal care aides, retail sales persons, and
Historically, Colorado has had a relatively low registered nurses over the coming decade.
share of residents 65 and older; in 2015,
Colorado was the 13th youngest state in the If there are not enough new workers with the
nation with a median age of 36.5. appropriate skills to fill the jobs vacated by
retiring employees, Colorado runs the risk of
During the same time, Colorado’s growth rate constraining economic growth. Further
in the 65-and-over and 85-and-over population limitation may come from the decline in
was the third and 15th fastest in the country, incomes as Coloradans retire and live on
respectively. This is largely due to the number pensions and savings.
of baby boomers (born between 1946 and 1964)
in the state. With less spending from households headed
by 65-and-older Coloradans comes reduced
Baby boomers account for 1 out of every 4 overall demand and slower economic growth.
Coloradans and as they get older, so too does The drop in income and overall household
our overall population. Soon, our “young state” expenditures also puts downward pressure on
will be similar in age to the rest of the nation. state tax revenues: The Colorado Futures
As this happens, economic output throughout Center projects state income taxes and state
the state will be affected. sales taxes will grow at a slower rate due to the
aging of Colorado’s population.
Coloradans Over 65 Expected
to 65
Coloradans Over Increase Dramatically
Expected to Increase Dramatically When combined with the greater demand
2,000,000 seniors place on public services such as health
1,745,193 care, long-term care, income support, and
1,750,000
property tax rebates, there will likely be a
1,500,000 1,495,072 smaller share of public resources available in
1,256,306 the future to be spent on services promoting
1,250,000
opportunity, such as higher education, K-12
1,000,000 education, preschool, child care, housing,
895,873
750,000
health care, and transportation.
554,934
500,000
417,987 A More Diverse Colorado
250,000 329,265
The number and share of racial and ethnic
0
1990 2000 2010 2020 2030 2040 2050
minorities in Colorado are projected to
increase over the next two decades, growing
Source: Colorado Demography Office, population by single year of age & region from 1.8 million in 2017 to 4.0 million in 2050.
7Colorado's Hispanic Population is Expected Median Income By Race
to Increase
$80,000
Percent of Total Population
75% 69% $71,406 $70,370
54%
50%
$60,000
35%
$49,201
Median Income
$48,058
25% 22%
$42,216
$40,000 $37,119
0%
15 20 025 030 035 040 045 050
20 20 2 2 2 2 2 2
$20,000
White Hispanic Black Asian
Native American
Source: Population of Colorado’s Racial and Ethnic Groups, 2000-2050,
Colorado Demography Office, 2016
$0
ite ck an ian /PI no
Wh Bla Alask As aiian /Lati
Racial and ethnic minorities are predicted to / aw ic
an an
eric v e H Hisp
comprise about 46 percent of Colorado’s m Na
ti
eA
population in 2050, compared to about 30 tiv
Na
percent in 2015. Hispanics will comprise the Sources: American Community Survey, 2016 1-year Estimates for Median
largest share of Colorado’s racial and ethnic Family Income; 2011-2015 5-year Estimates for Poverty Rate and
Educational Attainment; Bureau of Labor Statistics, Current Population
minority population — over one-third — by Survey, 2016 Annual Average Unemployment Rates; 2016 Survey of
Consumer Finances, Federal Reserve Board
2050.
Colorado’s minority population tends to be For example, they currently have lower
younger and Hispanics will comprise over 60 incomes, higher poverty rates, higher
percent of the growth in our working-age unemployment rates, less assets, lower
population between 2017 and 2020 and each educational attainment levels, more at-risk
decade through 2050. However, minorities in students, lower homeownership rates, and
Colorado currently face numerous barriers to poorer health outcomes than the majority
economic mobility. white population. We must address current
gaps in educational and skills attainment if we
want to ensure qualified workers fill the jobs of
the future and find opportunity themselves.
To effectively address these challenges,
Colorado must confront these disparities.
8Colorado’s Economy:
Strong Yet Uneven
In recent years, Colorado’s economy has been When adjusting for inflation, average
strong, growing faster than the national
economy and that of most other states. In weekly wages have been essentially
August 2017, our state had the second lowest flat since 2000: They’ve only increased
unemployment rate in the nation at 2.4 $33, or a little over 3 percent, since
percent, near its lowest level on record.
Unemployment is projected to remain at 3 2000.
percent or less in 2018 and 2019.
The total personal income in the state, which is
Colorado created 217,000 net new jobs an overall measure of the size of Colorado’s
between 2014 and 2016 — that’s about 70,000 economy, grew at an average rate of 5.4
per year on average. The expectation is to add percent each year between 2014 and 2016. This
another 50,000 jobs each year from 2017 amount is projected to grow between 5
through 2019. percent and 6 percent between 2017 and 2019.
But a tight labor market and lack of qualified The Leeds Business Confidence Index shows
workers have analysts believing economic businesses’ expectations for future growth
growth is being held back. They argue remain positive. The September 2017 state
Colorado needs more workers; these could be leading index published by the Federal Reserve
older Coloradans foregoing retirement, new Bank of Philadelphia projects Colorado’s
people moving to the state, or simply an economy will continue to expand into the first
increase in the number of people joining the quarter of 2018, and the Colorado Secretary of
workforce. State reports the number of new business
entities increased by 5.1 percent in the third
As many economists predicted, these quarter of 2017 over the same period last year.
conditions are beginning to put pressure on
employers to increase wages. In October 2017,
average wages in Colorado increased year-
over-year by 2.7 percent or $0.73 per hour.
However, the pace of wage growth has been
much slower than in the recovery periods from
past recessions.
9Uneven Growth Throughout the
State
The unemployment rate in every Colorado
metro area is lower than the national average,
as well as lower than it was in 2016. The same
Unemployment & Job Growth Across Colorado
holds true for year-over-year growth in the
number of jobs for each metro area except 0.2%
National
Grand Junction, as illustrated in the graphic to 4.1%
the right. Colorado 1.7%
2.3%
Colorado was recently ranked as one of the top Fort Collins
3.3%
1.9%
five states in the nation based on its low share
3.7%
of “distressed communities.” Produced by Boulder
1.9%
the Economic Innovation Group, the ranking 3.6%
says 45 percent of Coloradans — that’s 2.7 Greeley
2.1%
million people — live in “prosperous 1.4%
Denver
communities,” but some parts of the state 2.2%
aren’t faring as well. In compiling its distressed Colorado Springs 1.1%
2.7%
community rankings, EIG examines seven
factors: Grand Junction 0.2%
3%
• Population over 25 without a high school
0.06%
diploma Pueblo 3.5%
• Amount of vacant housing
0% 1% 2% 3% 4% 5%
• Prime age population (25-64) not working
• Poverty rate
• Community’s median income compared to Unemployment Job Growth
the state’s median income Source: Bureau of Labor Statistics, civilian labor force/unemployment
• Change in jobs between 2011-2015 by state/metro area, not seasonally adjusted, September 2017
• Change in the number of businesses
between 2011-2015
Although Colorado ranks low on these
measures as a state, 11 counties in south and
southeastern Colorado are listed as “distressed
communities” due to high poverty rates, many The five counties with the highest distressed
vacant houses, low median incomes, and a loss ratings are illustrated in the graphic below.
of jobs and businesses.
Most Distressed Counties in Colorado
Crowley Bent Huerfano Otero Costilla
Distressed Rating: 99.6 Distressed Rating: 99.2 Distressed Rating: 96.0 Distressed Rating: 95.7 Distressed Rating: 94.9
Population: 5,551 Population: 5,895 Population: 6,502 Population: 18,572 Population: 3,581
Median Income: $31,164 Median Income: $36,802 Median Income: $31,709 Median Income: $32,316 Median Income: $31,346
Poverty Rate Adults Not Working 40%
No High School Diploma
50% 100%
72%
33.4% 63.6% 24.7%
23.8%
25.6% 24.3% 24.7% 46.9% 47.5%
25% 18.5% 50% 20% 16.6% 15.2%
34.4%
11.6%
0% 0% 0%
ley Bent uerfanoOtero Costilla ley Bent uerfanoOtero Costilla ley Bent uerfanoOtero Costilla
Crow H Crow H Crow H
Source: EIG Distressed Communities Report
10But it’s not just rural areas — even Beyond regional differences, some Coloradans
communities in metro Denver are facing are more likely to experience unemployment
economic distress. For example, the section of than others. Despite Colorado’s low
north and northeast Aurora comprising the unemployment rate in 2016, women and
80010 zip code is considered distressed, even people of color experienced unemployment
though Arapahoe County and Denver County rates about one-third higher than those of
are categorized as prosperous.
Prosperous Counties Still Have men and white Coloradans. When looking at
Distressed Communities unemployment by age, teenagers have the
The 80010 zip code, part of Arapahoe County,
highest unemployment rate by far, while older
has a distressed rating of 80.7, but Arapahoe Coloradans see a substantial drop. This is
County as a whole only rates at 2.9. largely due to retirement and workforce exits,
40% so these Coloradans are not counted in
36.3% unemployment statistics.
32.5% 32.2% Unemployment Rate in Colorado
30% By Race, Gender, Age
22.5%
Hispanic 4.7%
20% Black 4.8%
White 3.2%
11.2%
10% 8%
Men 3.6%
Women 3%
0%
80010 Arapahoe County
Poverty Rate No H.S. Diploma Adults Not Working Aged 16-19 13%
80010 Arapahoe County Aged 20-24 4.2%
Aged 25-34 3.5%
Other Other
29.5% 16.7%
White White Aged 35-44 3.1%
54.7% Hispanic 73.1%
Aged 45-54 2.6%
18.7%
Hispanic Aged 55-64 1.7%
54% Black
Black 10.2%
16% Aged 65+ 2.6%
0% 5% 10% 15%
$70,000 Source: Bureau of Labor Statistics Current Population Survey,
$62,237
Employment Status of Civilian Non-Institutional Population, 2016
$60,000
Annual Averages. Percentages are out of population referenced.
Median Income
$50,000
$40,000 $35,226
$30,000
$20,000
$10,000
$0
80010 Arapahoe County
Source: Economic Innovation Group,
Distressed Communities Report
11Growth in Low-Wage Sectors Three of these industry sectors pay average
wages below 200 percent of the federal
About two-thirds of all new Colorado jobs poverty level (FPL) for a family of four, an
projected to be created in 2017 are found in five amount many analysts use as a rule of thumb
industries: for family-supporting wages. Two other
• Health care and social assistance industries — health care and social assistance
• Accommodations and food services and construction — pay average wages barely
• Retail trade above 200 percent of FPL. However, the
• Professional, scientific, and technical services average wages in the accommodations and
• Other services (except public administration) food services industry are below the amount
needed to keep a family of four out of poverty.
About 6 out of 10 new jobs projected to be Only the professional, scientific, and technical
created in Colorado through 2026 will occur in services industry pays average wages high
six industries — the first four listed above plus enough to support the needs of most families.
two others:
• Construction Many Colorado Workers Are In Low-Wage Jobs
• Education services
100%
Low-paying jobs in these industries include 90%
waiters and waitresses, cashiers, home health 80%
Percent of Coloradans
aides, personal care aides, child care workers,
stock clerks, teacher’s aides, construction 70%
61.9% 62%
laborers, and hairstylists. 60%
50%
40%
30%
MostMost
New Jobs Will Be in Low-Wage Industries 22%
New Jobs Will Be in Low-Wage Industries 20% 13%
Professional, 10%
Scientific, & $92,300
0%
Technical Services
2004 2016
Construction $58,292
Health Care &
$51,896 Workers In Jobs Below 200% FPL
Social Assistance
Workers in Jobs Below 100% FPL
Family of Four,
$49,200
200% FPL
Source: Bell analysis of data from Bureau of Labor Statistics,
Educational Occupational Employment Statistics
$44,148
Services
Compared to other states, Colorado has
Other Services $38,012 historically had a smaller share of residents
working in low-wage jobs, but during 2016,
Retail Trade $31,928
almost 1 in 4 workers — 500,000 Coloradans —
worked in an occupation with median wages
Family of Four, FPL $24,600 unable to keep a family of four out of poverty.
Accommodation &
Unfortunately, the share of workers in these
Food Services
$22,048 low-paying jobs has grown by 69 percent since
2004, when about 1 out of 8 Coloradans
$0 ,000 50,000 75,000 100,000 125,000 worked in these low-wage jobs. In 2016, about 3
$25 $ $ $ $
of every 5 workers — 1.4 million Coloradans —
Two-thirds of projected new jobs through 2026 will be in all
of these industries, except for the other services industry. worked in an occupation with median wages
less than 200 percent FPL for a family of four.
Source: Colorado-Based Business and Economic Research, Colorado
Department of Labor and Employment
This rate has stayed nearly constant since 2004.
12Joseph Zimmerman, a graduate student at the Over 20% of U.S. Income is
University of Colorado at Denver, analyzed the Earned by Top 1% of Earners
changes in average income, living costs, and 25%
net income for various types of low- and
middle-income families across Colorado 21.92% 22.03%
21.52%
between 2001 and 2015. He found, when
adjusted for inflation, families with higher 20%
19.86%
incomes — defined as double their county’s
median — saw their incomes grow faster than
costs over this period. However, families with 15% 15.23%
lower incomes — defined as equal to their 14.33%
county’s median — saw their average costs 12.67%
grow faster than their incomes. 10% 9.03%
10.02%
8.87%
Despite Booming Economy,
Inequality Persists 5%
70 975 980 985 990 995 000 005 010 015
19 1 1 1 1 1 2 2
One of the major forces affecting the future of 2 2
opportunity in Colorado is economic inequality, 1928: 23.94%
including both income and wealth inequality. Source: Emmanuel Saez, Top U.S. Incomes 2015,
While these two measures are deeply University of California at Berkeley
interrelated, they are not the same and
different policy solutions are needed to address
each. Income Inequality
How Does the Income of the Top 1%
Income includes wages, salaries, interest on Data from a Compare
variety oftosources illustrate
the Bottom 99%? the
savings accounts, dividends, profits from escalating expansion of income inequality in
$1,500,000
business ventures and collecting rents, and the United States. This is seen in the share of
capital gains. On the other hand, wealth, or income earned by the top 1 percent compared
$1,153,292
“net worth” is the difference between an to other U.S.$1,101,214
households, which has risen
individual’s assets and liabilities. dramatically since the 1970s. New data from
$1,000,000
the Federal Reserve’s Survey of Consumer
Assets include things such as the value of Finances confirms this trend, showing the
ownership in a personal residence, value of share of income received by the top 1 percent
vehicles, cash in savings, checking, and money rose to 23.8 percent in 2016. This is very close to
$500,000 $410,716
market accounts, and investments in stocks, $389,436
the historic high reached in the 1920s, just prior
bonds, mutual funds, real estate, and to the onset of the Great Depression.
retirement accounts. Liabilities are debts
$54,809 $45,567
individuals owe on car loans, credit card Several$0
sources point out the root of this
balances, mortgages, student loans, or other growing incomeColorado
inequality is exploding wage
National
bills yet to be paid. Subtracting the value of inequality. Wages for the top 1 percent rose
liabilities from the value of assets determines almost 157 percent between 1979 and 2015,
an individual’s net worth. Average Annual Income of Top 1%
while the increase for the bottom 90 percent
Minimum Income Needed to Be Top 1%
was onlyAverage
about 21 percent over the same
Annual Income of Bottom 99%
period.
Source: Economic Policy Institute, Income
Inequality by State/Metro/County, 2016
1312.67%
10% 9.03%
10.02%
8.87%
Income inequality is not isolated to certain The most income-unequal metropolitan areas
regions
5% or locations in the United States, in Colorado also hold some surprises: EPI’s data
whether 70 urban
75 80or9rural.
85 990It 9exists
95 000 in00all
5 regions
10 15 show Glenwood Springs ranks first in the state
19 19throughout
19 states
and all 1 1 1 the2 country,
2 20 20 and ninth in the country, with the top 1 percent
including Colorado. The 1928:top 1 percent takes in
23.94% making 42.4 times more than the bottom 99
16.6 percent of all income in Colorado, percent, with average annual incomes of
Source: Emmanuel Saez, Top U.S. Incomes 2015,
compared toUniversity
20.1 percent nationally.
of California at Berkeley According $2,441,991 and $57,634, respectively. Sterling,
to the Economic Policy Institute (EPI), this puts Colorado ranks second in the state for income
Colorado at 21st among the states for income inequality and 21st nationally — the only other
inequality. Colorado metro area in the nation’s top 25.
How Does the Income of the Top 1%
Compare to the Bottom 99%? Wealth Inequality
$1,500,000
As bad as income inequality has become,
$1,153,292 wealth inequality is an even larger problem,
$1,101,214 since wealth is much more highly
$1,000,000 concentrated in the population than income.
This is important because wealth fuels the
kinds of investments that promote economic
mobility, such as a down payment on a house,
$500,000 $410,716 tuition for college, or start-up money for a
$389,436
business.
$54,809 $45,567 Wealth also provides a cushion against
$0 setbacks like a job loss, health problems, or a
Colorado National major car repair bill. Income determines
whether families can meet their current needs,
while wealth helps them advance economically
Average Annual Income of Top 1%
Minimum Income Needed to Be Top 1%
over the long term. It can be the difference
Average Annual Income of Bottom 99% between just getting by and getting ahead.
Plus, wealth can be passed on from one
Source: Economic Policy Institute, Income generation to the next, giving young people a
Inequality by State/Metro/County, 2016
leg up as they start out in life.
EPI’s data reveal some surprising information
Recent data from the Federal Reserve shows,
about the location and extent of the highest
in 2016, the top 10 percent of the population
levels of income inequality within Colorado as
received about half of all income, but held
well.
more than three-quarters of all wealth in the
country. Not only do those at the top have
For example, the most income- more wealth than those at the bottom, but
unequal county in our state is Custer their wealth is made up from different types of
assets as well.
County, where the top 1 percent makes
86.6 times more than the bottom 99 Since wealth is the difference between a
percent, based on respective average household’s assets and liabilities, debt is a
crucial element driving the country’s growing
annual incomes of $3,016,497 and wealth inequality. Between 1999 and 2016, the
$34,823. mix in the type of debt Colorado families have
has changed dramatically. While mortgage
Custer County ranks fifth highest in the debt is still the largest, it has remained
country on this measure. Two other Colorado constant as a share of overall family debt,
counties are in the nation’s top 25 — Pitkin going from 77 percent in 1999 to 73 percent in
County at number 9 and San Miguel County at 2016.
number 22.
14However, the amount of student debt held Implications
by families increased by almost 600 percent,
and its share of family debt grew by almost 200 Clearly, both income and wealth inequality
percent. Student loan debt is now the largest have negative implications. Economic
source, in dollar terms, of nonmortgage debt inequality adversely affects the major levers of
owed by families nationally, according to the opportunity, including education, health, work
Federal Reserve’s 2016 survey. policies, housing, and asset building. It also
strains Colorado’s and the country’s overall
More Colorado Families Struggling With economic stability and productivity.
Student Debt, Other Non-Mortgage Debt
The recently passed federal tax legislation is
projected to increase the level of wealth and
$830 income inequality in the U.S.
1999 $2,600 Research finds inequality leads to several
negative outcomes, including:
$1,810 • Unequal access to education opportunities
• A range of health problems
• Reduced economic growth
Up 578.3% since 1999 $5,630 • A shrinking middle class
2016 Up 30% since 1999 $3,380 The last point above is crucial, as income and
wealth inequality in America now affect
Up 148.1% since 1999 $4,490 everyone struggling to enter or stay in the
middle class. Even within the bottom 90
percent of American households, though,
$0 $2,000 $4,000 $6,000 these repercussions are especially severe for
Debt Owed those who have historically been left out and
left behind by current policies, programs, and
Student Loans Credit Cards Auto Loans
practices.
Source: Federal Reserve Bank of New York, State Level
Household Debt Statistics 1999-2016, May 2017 As the Institute for Policy Studies points out,
continued acceleration of the racial wealth
divide will impact black and Hispanic/Latino
families and eventually the economy at large,
as “the majority of U.S. households will no
longer have enough wealth to stake their claim
in the American middle class or higher.”
Given that almost half of Colorado’s population
in 2050 is projected to be comprised of racial
and ethnic minorities, it’s not a stretch to say
the future of the middle class depends on
whether we can reverse growing racial
inequality.
15Public Investments:
The Chopping Block
Investment in Colorado State Services Near Historical Low
6%
5.5%
Share of General Fund Revenues
5%
4.5%
4.36%
4.16%
4%
3.9%
3.7%
3.6%
3.5% 3.53% 3.6%
3.26%
3%
76 6
77 7
78 8
79 9
19 80
81 1
82 2
83 3
84 4
85 5
86 6
87 7
88 8
89 9
19 -90
91 1
92 2
93 3
94 4
95 5
96 6
97 7
98 8
99 9
00 0
01 1
02 2
03 3
04 4
05 5
06 6
07 7
08 8
09 9
20 -10
1
2
13 3
4
5
6
20 -17
8
-1
-8
-9
-0
-8
-1
-8
-9
-9
-0
-0
-1
-1
-8
-9
-0
-7
-8
-9
-0
-7
-7
-8
-8
-9
-9
-0
-0
-1
-7
-8
-9
-0
-1
-1
-8
-9
-0
20 -0
10
-
12
11
14
16
15
90
17
80
75
19
: Recession
Source: State spending/personal income data from Legislative Council Service, state recession data from Kansas City Federal Reserve Bank
As more and more low- and middle-income Colorado’s General Fund — the account that
Coloradans face growing costs of living and funds most of the services promoting
stagnant incomes, it’s an important time to opportunity — is comprised of two-thirds
look to public investments. Public investments income taxes paid by individuals and
play a vital role in building and maintaining businesses, while about one-third is made up
infrastructure, educating residents, and by sales taxes. When Colorado grew and the
reducing the costs of services putting economy expanded, the total amount of
opportunities within reach of more families. A money spent on state government did
strong public sector could make increase, but the amount of government
postsecondary education more affordable, revenues as a share of the economy has shrunk
expand health insurance coverage, increase by about 20 percent since the 1990s.
access to preschool, and lower the costs of
child care — all ways to lessen the squeeze From the mid-1970s through 2000, Colorado
many families in Colorado feel today. invested an average of 4.5 percent of the
economy in state services each year (calculated
Today, the share of Colorado’s economy as the ratio of General Fund revenues to total
invested in public services aimed at expanding state personal income). The share has varied
opportunity is a smaller portion than at almost depending on the strength of the economy,
any time in the past 40 years. This means but since 2000, Colorado has only invested, on
Colorado’s state government is less able to be average, 3.8 percent of the economy in state
the strong public sector partner our services.
communities need.
16At 3.7 percent this year, Colorado is investing Higher Costs for Coloradans
almost a historically low percent of its economy
in state services. This amount is only found in Colorado is a low-tax state and typically ranks
years when Colorado experienced a recession low nationally in terms of state taxes per $1,000
or the fallout of one: The share dropped to 3.9 in personal income. As a result, Colorado
percent in the middle of the shale oil bust and doesn’t have a lot of revenue to spend on state
recession in 1983, then saw lows of 3.6 percent services. Investing a smaller share of our
in 2002 following the dot-com crash, and 3.3 economy in state services means an already
percent at the bottom of the Great Recession lean state government has even less to work
in 2009 and 2010. However, Colorado’s current with. People all over the state feel these
low rate of investment is not due to the effects, making it harder for them to access the
effects of a recession; in fact, Colorado’s levers promoting opportunity.
economy today is one of the fastest growing in
the country. General Fund revenues in 2018 We see the consequences most notably when
and 2019 are expected to be an even smaller it comes to education, child care, and housing.
portion of the economy than now. Colorado families now shoulder twice as much
of the cost of tuition at public colleges and
Total state and local expenditures made up universities than they did in 2001. About 1 out
about 20 percent to 24 percent of our economy of 3 4-year-old students who qualify for the
in Colorado between 2000 and 2015. Nationally, Colorado Preschool Program are not served
that range is generally between 21 percent and because of lack of state funding. Many
25 percent of the economy. What this shows is Colorado school districts have cut staff, half are
how Colorado spends about the same amount operating on four-day weeks, and many are
of our economy on local government services forced to take further measures because state
as the national average, meaning we aren’t support is not keeping pace with costs. Only
using local government spending to about 1 out of 8 children from low- and middle-
compensate for the smaller portion spent on income families eligible for child care
state services compared to other states. assistance currently get it, partially due to a
lack of state funding. At a time when many
Total State & Local Expenditures Coloradans cannot find affordable housing, our
As Share of Economy state devotes less funds for the construction of
25%
inexpensive options than most other states.
21.9%22.3% Colorado’s aging population, a shrinking sales
20.8%
20%
19.7% tax base, and fewer local property tax revenues
going to education all put pressure on state
funding. Add in the cut of state income and
15%
sales tax rates in the early 2000s, and the
amount of revenues generated by state taxes
12% 11.9% 11.6% 11.7% has dropped considerably.
10%
Also straining Colorado’s ability to adequately
invest in important services: rigid constitutional
5%
provisions. The Taxpayer Bill of Rights, or
TABOR, prohibits the use of a progressive
income tax and bans real estate transfer taxes
0%
and statewide property taxes. When coupled
2000 2015 with TABOR, the Gallagher amendment makes
it difficult for local governments, including
Ratio of CO Personal Income to State/Local Expenditures
school districts, to adjust their mill levies to
Ratio of US Personal Income to State/Local Expenditures
maintain revenues from local property taxes.
Ratio of CO Personal Income to Local Expenditures
The inflexibility of these provisions results in
Ratio of U.S. Personal Income to Local Expenditures
inequities among school districts due to the
Source: U.S. Census. State and Local Government Finance level of local property taxes residents pay, with
17many in wealthier districts paying a smaller
share of property values than those in poorer Recommendations
ones.
Colorado should amend TABOR to allow for a
As policymakers attempt to break down some progressive income tax, raise the rates on
of the barriers limiting economic opportunity, higher incomes, and cut the rates on low and
they find they lack the tools available in other middle incomes. This will increase revenues
states, but we can change that. and make the tax system fairer.
Colorado should recognize the economy has
changed and levy sales taxes on more
services, increasing revenues and making the
tax system more progressive.
Colorado should follow the 35 other states
that have either eliminated or limited the
subsidy paid to large retailers to collect state
sales taxes.
Colorado should apply a minimum property
tax rate in local school districts, which would
be fairer, raise more local funds, and free up
state revenues for other purposes.
Throughout the rest of this report, we’ll offer
more recommendations for other public
investments that would benefit Colorado and
its citizens.
18Automation:
The Deciding Moment
Many futurists, economists, and high-tech Conversely, the Organization for Economic
business leaders predict there will be fewer Co-operation and Development (OECD)
jobs in the future because robots and other argues while specific duties might be
machines will be able to do everything humans automated, few total occupations will be.
can do, only better. Concerns about machines Because of this, OECD estimates only 9 percent
putting people out of work aren’t new. of jobs in the U.S. are at high risk of elimination.
Historically, it has eliminated some jobs, but The consulting firm McKinsey and Company
automation is also credited with increased provides an even lower assessment: It says less
productivity, improved performance, and lower than 5 percent of jobs are vulnerable to
costs of products or services. Over the years, complete automation, but 46 percent of all
automation has increased demand, tasks U.S. workers perform could be
stimulated economic growth, and resulted automated. Workers who perform routine
in more overall jobs. physical activities, collect and process data, or
are in low-skill, routine jobs — such as filing
However, current advances in artificial clerks and assembly line workers — are most at
intelligence (AI) and robotics could mean risk.
workers will be replaced across all industries at
roughly the same time, not just in specific jobs Other studies focus on the effects of
as in the past. Workers will have to do more automation on specific occupations. For
than change industries to find work; they will example, economists at the U.S. Department of
have to develop new skills. This represents Commerce identified jobs most likely to be
change on a previously unseen scale. eliminated by the introduction of automated
vehicles.
What Jobs Will Be Automated?
What Jobs in Colorado Are at Risk?
Several recent studies assess the types of jobs
most likely to be partly or completely Using the previously cited studies, the Bell
automated. While these studies come to identified occupations in Colorado judged to
different conclusions in terms of the number of be at high risk to automation. This produced a
jobs affected, they generally find low-wage list of 307 occupations that could have all or
jobs and those requiring less education are the part of their functions automated. We then
most vulnerable. ranked the occupations based on the number
of Colorado employees in each occupation.
Two researchers at Oxford University (Frey,
Osborne) determined which of 702 U.S. A total of 1.1 million Coloradans, or 41
occupations would most likely be automated
over the next 10 years to 20 years. Grouped into percent of the total workforce, are
high-, medium-, and low-risk categories, Frey working in occupations judged as high
and Osborne ultimately decided 47 percent of
U.S. occupations fall in the high-risk category.
risk of being automated.
Jobs that are low-wage, require less education,
We then pinpointed occupations judged by
and are in the office and administrative
Frey and Osborne to have a 90 percent or
support, transportation, logistics, and
higher probability of being automated. This
production industries are considered the most
produced a list of 15 occupations, totaling
at risk by Frey and Osborne’s analysis.
477,000 Colorado workers.
19ely
Less
Workers WithWorkers
ToEducation
Be Automated
In
Lower With Lower
Occupations
Incomes MoreIncomes
&Workers
Less
Likely To&Be
Education
With Less
In Education
Lower IncomesIn
Automated & Occupations
Occupations More
Less
Workers More
Education
Likely To
With
Be LikelyIncomes
InLower To Be Automated
Automated
Occupations More
& Less
Likely
Workers
Education
To BeWith
Automat
In Occu
Lowe
Food
Food Prep/Service Prep/Service
Workers ($9,532)Workers
Food($9,532)
Prep/Service Workers ($9,532) Food Prep/Service Workers ($9,532) Food Prep/Service Worke
Hosts/Hostesses
Hosts/Hostesses ($10,418) ($10,418)
Hosts/Hostesses ($10,418) Hosts/Hostesses ($10,418) Hosts/Hostesse
Restaurant Cooks Restaurant
($19,927) Cooks ($19,927)
Restaurant Cooks ($19,927) Restaurant Cooks ($19,927) Restaurant Cook
Retail
Retail Salespersons Salespersons ($20,615)
($20,615) Retail Salespersons ($20,615) Retail Salespersons ($20,615) Retail Salesperson
Bookkeeping/Auditing
ookkeeping/Auditing Clerks ($23,616)
Clerks ($23,616) Bookkeeping/Auditing Clerks ($23,616) Bookkeeping/Auditing Clerks ($23,616) Bookkeeping/Auditing Clerk
Counter and Rental
Counter and Rental Clerks ($25,462) Clerks ($25,462)
Counter and Rental Clerks ($25,462) Counter and Rental Clerks ($25,462) Counter and Rental Clerk
Receptionists/Information
ptionists/Information Clerks ($26,005) Clerks ($26,005)
Receptionists/Information Clerks ($26,005) Receptionists/Information Clerks ($26,005) Receptionists/Information Clerk
Cashiers ($26,682)Cashiers ($26,682) Cashiers ($26,682) Cashiers ($26,682) Cashier
Shipping,
ng, Receiving, TrafficReceiving, Traffic
Clerks ($27,238) ClerksReceiving,
Shipping, ($27,238) Traffic Clerks ($27,238) Shipping, Receiving, Traffic Clerks ($27,238) Shipping, Receiving, Traffic Clerk
Landscapers/Groundskeepers
ndscapers/Groundskeepers ($31,429)
($31,429) Landscapers/Groundskeepers ($31,429) Landscapers/Groundskeepers ($31,429) Landscapers/Groundskeepe
Industrial Truck/Tractor Operators
rial Truck/Tractor Operators ($32,618) ($32,618)
Industrial Truck/Tractor Operators ($32,618) Industrial Truck/Tractor Operators ($32,618) Industrial Truck/Tractor Operato
ecretaries/AdminSecretaries/Admin Assistants
Assistants ($33,616) ($33,616)
Secretaries/Admin Assistants ($33,616) Secretaries/Admin Assistants ($33,616) Secretaries/Admin Assistan
Equipment Operators/Engineers
pment Operators/Engineers ($38,250)
Equipment ($38,250)
Operators/Engineers ($38,250) Equipment Operators/Engineers ($38,250) Equipment Operators/Engineer
Insurance Sales
Insurance Sales Agents ($39,951) Agents ($39,951)
Insurance Sales Agents ($39,951) Insurance Sales Agents ($39,951) Insurance Sales Agen
Accountants andAccountants and Auditors
Auditors ($72,883) ($72,883) and Auditors ($72,883)
Accountants Accountants and Auditors ($72,883) Accountants and Auditor
1070 2080 3090 40
100 050 1060 020
70 1030
80 20
4090 0 3010010 40
50 60 20 50
70 30 60
80 40 70 0 80
90 50 10 90
100 60 70 100
20 80
30
nal Attainment Percent of Workers with Educational Attainment Percent
Percent of Workers with of Workers with
Educational Educational
Attainment
Percent Attainment
of Workers with Educational Attainment
Percent of W
st
Diploma
Associates PostThan
Graduate Degree
Degree
Less Graduate
High Degree
Bachelor's
SomeSchool
College Bachelor's
DegreePostHigh
GraduateDegree
Associates
School Degree Associates
Degree
Diploma Degree
Bachelor's
Less
Some
ThanCollege
Degree Some
High School
Post
High College
Associates
Graduate
SchoolDegree
DegreeHigh School
Diploma LessDiploma
Some
Bachelor's
College
ThanDegree LessPost
High School
High Than High
School
Associates School
Graduate
Diploma
Degree
Degree Less
Some
Than
BacC
rkersPredominantly female
Predominantly Predominantly
workers male
Male
workers male
and female workers
Predominantly
workers Predominantly
female workers
Predominantly female workers
Male and
male workers female Male and
Predominantly
workers female
female workersmale
workers
Predominantly Male and femalePredominantly
workers workers female worker
Predomin
Sources: Frey and Osborne and Colorado Department of Labor and Employment, Labor Market Information, Occupational Employment Projections Unit;
Bell Policy Center calculations based on CPS data 2015, 2016, 2017, IPUMS.
This doesn’t mean these jobs will be high-tech industries help drive Colorado’s
automated out of existence; some may, but it’s economy and accounted for half of the job
likely many more will see tasks change in some growth in 2016. About 13 percent of the total
way and workers will need to learn new skills to jobs added in 2017 are in industries that are
evolve in their roles. sources of primary and advanced technology
jobs. These tech firms include more than those
As many of the studies suggest, most of these that work on AI, robotics, and business process
occupations are categorized by low skill with automation, and Colorado is home to robot
low pay. Over half are occupations with mostly manufacturers and others that implement
female workers, while two have almost all men. automation processes. Their continued
Almost 1 in 5 Colorado workers work in jobs expansion helps propel economic growth and
most likely to be affected by automation. creates jobs that make, install, service, and
repair robots, and other forms of automation.
To retain and better prepare these workers for
the jobs of the future will require a focus on In addition to the effects on high-technology
adult education, skill training, and help in industries, automation can improve the
making this retraining affordable. It will also performance and output of firms in other
likely mean an investment in work supports industries. The University of Colorado Leeds
and other assistance, such as expanded School of Business says increased automation
unemployment insurance payments, to help and technological advancements helped
workers as they transition into new jobs. Colorado manufacturers add to the state’s GDP
with a smaller workforce.
Automation Could Promote
Advanced manufacturing is one of the 14 key
Economic Growth, Especially in industries comprising part of Colorado’s sector
Colorado’s High-Tech Industries strategy to promote economic development. It
includes companies that may use or develop
Colorado has a relatively high concentration of high-tech processes such as computer-aided
technology-related firms and workers. These design, robotics, and advanced material
20handling. Some industries, such as aerospace, Nationally, 94 percent of new jobs
electronics, and bioscience (also included
in Colorado’s sector strategy), are comprised created between 2005 and 2015
of more advanced manufacturing companies occurred in alternative work
than others, but most industries have some arrangements.
advanced manufacturing components.
Advanced manufacturing relies on innovative The number of total workers in “gig” or
technology, automated processes and “sharing” economy jobs totaled 0.5 percent of
methods to improve product design, and all workers in 2015.
production to gain a competitive edge.
A recent study by McKinsey Global Initiative
If Colorado doesn’t fully invest in robotics, AI, (MGI) finds between 20 percent to 30 percent
and other forms of automation, we stand to of the working-age population in the U.S. is
lose jobs and economic growth to states and engaged in some form of independent
countries that do. China recently became the earning. This could be in the form of second
largest growth market for industrial robots, jobs or using online platforms to sell goods
with its companies buying twice as many as and/or rent rooms in their homes. MGI says
U.S. companies did in 2015. some choose this approach to work, while
others are forced to do it because they cannot
Alternative Work Arrangements find traditional jobs or need extra money.
and Automation Workers who chose this approach generally
report higher levels of satisfaction than those
Working full-time at one job with a single in traditional jobs, while those who take this
employer is how many Americans viewed work approach out of necessity report the opposite.
for decades, but it may not be how we work in
the future. Because independent workers have limited
access to the income security protections of
The percentage of U.S. workers who have full-time jobs, MGI points out, “Labor market
engaged in alternative work arrangements, policies developed for the industrial era often
such as temporary help agency workers, on- do not apply to the world of independent
call workers, contract company workers, and work.”
independent contractors or freelancers, rose
from 10.7 percent in February 2005 to 15.8
percent in late 2015.
Recommendation
Colorado needs to address the disruptive
aspects of automation while reaping the
economic benefits. Colorado should convene
representatives from labor, the technology
industry, other businesses, academia, and
state and local governments and task them
with assessing the impact of automation. This
group should also develop recommendations
for balancing automation’s effects on
economic growth with those of affected
workers.
21Levers
Now that we understand the forces holding many Coloradans back from achieving economic
mobility, it’s time to explore how the following “levers” can help rebuild our state’s middle
class.
These levers are just some of the ways Colorado can implement broad change to support
low- and middle-income families across the state. Throughout our analysis of how these
levers currently operate and how they can better serve Coloradans, we offer
recommendations for how to capitalize on their benefits and most effectively impact
economic mobility in Colorado.
Education:
Learning to Live and Work In 2015, the average cost for a Colorado
4-year-old to attend preschool was
$11,089
Early Childhood Education In 2015, the average cost for a Colorado
4-year-old to attend preschool was
All children can benefit from responsive,
stimulating curricula and classroom
environments in their early years. This is
$11,089
especially true for children from low-income
and dual-language backgrounds. For a family making the state
median income of $60,629, that's
Yet, high-quality preschool is financially out of
reach for many. Nationally, the average cost of
18% of their annual income.
providing preschool ranges from $4,700 (part For a family making the state
day) to $8,600 (full day). Tuition charge to median income of $60,629, that's
parents can be even higher. As such, many
children don’t attend preschool, or instead 18% of their annual income.
attend lower-quality programs or child care
options. This means a significant number of
Colorado children lack access to critical early For a family of four earning $45,510
childhood learning experiences that could lead (185% of FPL), the cost of sending
to increased success and opportunity in
adulthood.
one kid to preschool jumps up to
To help rectify this problem, the Colorado
24%
For a family of four earning $45,510
Preschool Program (CPP) provides preschool
(185% of FPL), the cost of sending
funding for 3- and 4-year-old children who one kid to preschool jumps up to
have certain factors in their lives that increase
their risk for challenges later in school. To be 24%
eligible for the program, a 4-year-old must
have at least one risk factor (though most
served have two or more) and a 3-year-old Source: Center for American Progress Child Care
must have at least three. Desert Report, Bell analysis
22What
What RiskRisk Factors
Factors AffectAffect
Colorado According to the 2017 CPP Annual Legislative
Colorado Preschool
Preschool Program
Program Students?
Students? Report, in the 2015-2016 school year CPP served
Abusive Adult in 26,907 children, or nearly 20 percent of
Home
2.96%
Colorado’s 3- and 4-year-olds. CPP is funded at
Parental Drug or half the amount of per-pupil revenue districts
5.19%
Alcohol Abuse receive for other students; this amount is
determined and appropriated each year
Parent Under 18 5.52%
through the formula in the School Finance
Child in Foster Act. School districts receive funding for slots
5.77%
Care and are required to use at least 95 percent of
Homelessness 7.14%
them for half-day preschool.
Frequent
10.58% Colorado’s public investment in early childhood
Relocation
education (ECE) and child care programs adds
Parent Without
18.83% $832 million to the economy, in both short-
H.S. Diploma
and long-term benefits, according to estimates
Poor Social Skills 25.86% by Early Milestones Colorado. These benefits
include kindergarten students who are better
Needs Language
34.44% prepared to start school, higher academic
Development
achievement, higher adult wages, and
Eligible for Free or
Reduced Lunch
63.14% decreased rates of arrest. Early childhood
investments typically take time to produce
0% 25% 50% 75% 100% returns (e.g., reduced reliance on public
Percentage of CPP-Funded Kids assistance, or reduced crime in adulthood), but
CPP demonstrates savings more quickly. For
Source: 2017 Colorado Preschool Program Annual Legislative Report
example, CPP children are about half as likely
to repeat a grade in kindergarten through third
grade.
Which Children Are Served by As the 2016-2017 statewide average
Colorado Preschool Program? per-pupil funding was $7,425 for K-12
Asian: 3% education, this indicates a savings of
American Indian
or Alaska Native: 1%
over $11 million to the state in terms
Black: of additional funding saved from
8%
being spent on repeated grades for
three cohorts of CPP students, or
about $3,692,700 per cohort funded.
Hispanic: White:
54% 32% At the local level, the Denver Preschool
Program (DPP) helps Denver 4-year-olds
attend preschool, regardless of income. An
evaluation of the program demonstrates its
effectiveness in preparing children for success
through third grade, regardless of income level,
race, gender, or natural language. Earlier
analysis by the Bell cites longitudinal studies of
Two or More Races: 3% programs like CPP and DPP which find a
Less than 1 percent of children served by return on investment of nearly $13 for every $1
CPP are Hawaiian/Pacific Islander
invested. Nobel Laureate James Heckman’s
Source: 2017 Colorado Preschool Program
research also shows ample return on
Annual Legislative Report investment for preschool programs like CPP.
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