Defying high inflation and opening doors to higher-paying jobs
However, more should be done to ensure wages meet standards for the cost of living in Colorado and address persistent pay gaps for women and workers of color after four decades of wage stagnation.
Municipalities across the state are exploring raising the minimums in their communities; this report shows that wage increases in each community will help the state overall ensure that Colorado workers can benefit from the economic recovery and support small businesses by boosting consumer spending, reducing turnover, and giving workers a productivity boost.
The report shows that a hot labor market has led to historic real wage gains for those earning the least nationwide after the COVID-19 pandemic. This business cycle's impressive growth has been a notable exception to a disappointing rule — wages for middle-class and low-wage workers nationwide and in Colorado have stagnated over recent decades despite booming productivity growth.
Despite the wage increases, pay gaps persist and have grown larger over the last three years for women and workers of color. There is still work to be done to narrow the gap between workers' pay and their increasing productivity. Establishing strong labor standards, such as a higher minimum wage and rigorous enforcement of existing laws, is crucial to protect wage gains and further close the gap.
“In Colorado, record numbers of working people are standing together and fighting for the pay and respect they deserve. Together in unions, thousands of workers in our state have won huge raises and better benefits and conditions on the job. Care workers--some of the most underpaid and undervalued workers in our economy--won a historic industry-wide $15/minimum wage. These victories show what is possible when workers stick together and build strong unions–and we’re nowhere near done yet. We will continue to organize and fight to demand that every Coloradan–no matter what they look like or the kind of work they do–has a voice on the job and a fair share in the profits they work so hard to create,” said Stephanie Felix-Sowy, President of SEIU Local 105.
Low-wage workers have seen modest real wage gains when compared to middle-income earners. But when accounting for inflation, even these gains are relatively small and still fall far short of the standard for self-sufficiency.
“The rise of worker power is in the air, and locking in increased minimum wages in Colorado is essential to harnessing that power,” said Liza Nielsen, Shift Supervisor at Starbucks and Worker’s United organizer. When I hear about the trends of higher wages and lower unemployment rates since the beginning of the pandemic, as reflected in this report, it makes me think about my job at Starbucks. While the progress is encouraging, there is still so much work to be done. Our wages still do not comprehensively cover the cost of living, and the negative effects of the current minimum wage are very obvious. When employers tell us we should be grateful for the rise in wages over the past couple of years, it invalidates the struggle many low-wage workers experience. Securing a rise in the minimum wage through policy change would provide assurance to low-wage workers who continue to live paycheck to paycheck in order to make ends meet.”
Since the unique conditions and extreme disruptions created by the pandemic catalyzed these changes, the labor market will likely tilt back in favor of employers soon. So, these gains may be tenuous, but policy tools can help ensure they stick.
“The report makes it clear that passing living wage policies can seriously improve the current circumstances and financial futures for young people, especially young women and young people of color, across Colorado," said Kate Kelly, Boulder Regional Lead Organizer at New Era Colorado. “While the pandemic did compel elected officials and governments to take action to increase wages, this once-in-a-generation global event cannot be the only motivating factor to make sure people earn enough to live where their lives are. This year, we've already seen cities like Boulder reject the opportunity to increase the minimum wage despite the cost of living expenses soaring and opportunities to grow generational wealth becoming even more exclusive. Let us remind our elected officials that community members can and will hold them accountable to our needs at every opportunity, including the ballot box this November."
The CFI report highlights the importance of protecting the real wage gains of low-wage workers in Colorado. Establishing strong labor standards and enforcing existing laws is essential to ensure gains are not lost.
Colorado Fiscal Institute