Coloradans at higher income levels are increasingly more likely than poorer people to be employed and to be enjoying salary growth, according to new economic data and analysis presented to state lawmakers on Friday morning.
Furthermore, the analysis suggests no imminent end to the widening of the gap between the state’s haves and have-nots.
“I think there was some hope that this would be getting better as the overall macro-environment improved; (that) there’d be a catch-up in the low-income part,” state Sen. Chris Hansen, a Denver Democrat and Joint Budget Committee member, said at Friday’s hearing.
“It’s getting worse, not better.”
Colorado’s economic outlook is optimistic overall, though analysts stressed repeatedly that the omicron variant of COVID-19 contributes to ongoing uncertainty. The Taxpayer’s Bill of Rights requires the state to refund taxpayers in strong economic years, and, in a sign of how relatively well the state is doing now, analysts are now projecting close to $2 billion in total refunds in each of the next three fiscal years. Each of those totals would be by far the highest in the state since at least 2001.
But while Colorado has more than bounced back from a recession that set in early in the pandemic, at no point has the recovery been even.
After a brief dip in spring 2020, employment for people making at least $60,000 got back to roughly pre-pandemic levels by the summer of 2020, and legislative analysts now report that employment at this income level is up 9% over pre-pandemic levels.
By contrast, people at the middle and lower tiers have never gotten back to normal. Numbers presented Friday show employment for Coloradans making $27,000 or less is down 30% compared to before the pandemic. Employment at that tier is in fact falling, a sign that the rollback of federal unemployment benefits has not encouraged low-income workers to get back to work in as great of numbers as many officials hoped or expected.
The governor’s office also reported Friday that wages are up for professional and technical services, which generally offer the highest pay of any category measured by the state. People working in those sectors are closing in on $30 billion in combined earnings per fiscal quarter, up from $25 billion in early 2019. Meanwhile, wages and salaries are either close to or below pre-pandemic levels in other sectors that tend to pay less: arts, entertainment, recreation, accommodation and food service, retail, health care and social assistance.
“The top earners seem to be seeing significant increases in wages but the rest of the employment (categories) seem to be pretty steady,” Hansen said.
He asked the governor’s office: “Do you see factors in your forecast, in your analysis, that would tend to close that gap, or are we on a new trajectory here where that wage gap is going to continue to grow over time?”
Responded Meredith Moon, deputy budgeting director for Gov. Jared Polis, “Those sectors are going to lag. … I don’t think that we anticipate a huge uptick in wages and salaries in those sectors.”
It’s not as though the employers of low- and middle-income people don’t have any money to spare. Data presented by the governor’s office showed corporate profits actually reached record levels this year.
In a statement, Polis celebrated Friday’s economic forecast — particularly the fact that unemployment, which remains above the national average, has dipped in Colorado for a fifth straight month.
“Colorado is hiring,” he said. “Every day more Coloradans are joining innovative companies, starting new careers, or growing small businesses. As we head into 2022, I will work hard to save Colorado families and individuals money on fees and other costs.”
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