Income inequality in Colorado grows

Wages, which make up about 70 percent of gross income in Colorado, slowed for low- and middle-income Coloradans, according to a report by the Colorado Fiscal Institute.

IRS individual income tax data shows the wages of the poorest fifth of Coloradans grew by 1 percent in real terms since 1980, according to the Jan. 30 report.

During the same period, wages of the median Colorado worker increased 9.3 percent while the wages of the top fifth increased by 18.7 percent, the report said.

Income growth has been unequal for the past few decades with the poorest Coloradans losing ground, according to the report.

The incomes of the poorest 20 percent of Coloradans fell 11.7 percent from the 1990s to the 2000s, the report said.

Meanwhile, middle-class incomes in Colorado grew by 2 percent over the same period while the top 20 percent richest Coloradans saw their incomes increase around 14 percent, the report said.

The data takes into account how much wage earners pay in federal taxes, the value of food stamps, housing vouchers, and welfare and Social Security benefits.

However, the data does not account for realized capital gains. As a result, the study shows a somewhat lower level of inequality than would be the case if capital gains were included.

“As a higher portion of Colorado’s income gets concentrated in the hands of a few individuals, this leaves fewer customers with money to spend in the local Colorado economy,” said Chris Steffler, Fiscal Institute economist.

“When half of the state doesn’t have the disposable income to spend in the economy, everyone suffers,” Steffler said in a news release.


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