Stories such as Elizabeth’s are becoming increasing familiar in Colorado. The 52-year-old Littleton resident works as a UPS Store assistant manager and a linen service delivery driver but still only earns $19,000 a year.
And that’s even after working more than 40 hours a week.
“It’s still not enough,” said Elizabeth, who’s divorced and cares for a teenage daughter. “I feel like I could work 24 hours a day and still struggle.”
In Fort Morgan, 21-year-old Andrea faces a similar struggle as she works one job as a meat-trimmer at the local processing plant and another cleaning cars at an auto dealership. She’s also got two young children.
“It’s so hard for me to save money,” she said, “but I’m really going to try. Kids are just so expensive — they grow so fast and get sick out of nowhere.”
Too many Coloradans are increasingly finding themselves in low-wage jobs that make it hard to pay for basic needs, and their prospects for better jobs have been eroded.
That’s why now is the year we need to fast-track the enactment of a state version of the federal Earned Income Tax Credit, or EITC, a tax policy that helps 350,000 Coloradans make ends meet every year.
The need is dire, because the one thing our economy has been fast-tracking the last several years is historic, unprecedented tough times for working families. The proportion of low-wage jobs in Colorado — those paying under $12 an hour — has grown by nearly 11 percent since 2001, with 26.2 percent of workers in our state now classified in low-wage positions.
Older workers who once had middle-class jobs now find themselves having to take low-paying jobs, sometimes multiple ones, to get by. Meanwhile, they must compete for these low-wage jobs with many recent college graduates, who also can’t find anything other than low-paying positions. People without college or high school degrees now find it harder than ever to get even low-wage work.
The number of food preparation and food service workers more than doubled from 2001 to 2013, but the median wage actually fell by 5 percent, and 100 percent of those workers are now classified in low-wage jobs.
By activating the state Earned Income Tax Credit, Colorado would join 26 other states with their own EITCs. Some 25,000 military families in Colorado rely on the federal EITC and 18 percent of those who use the tax credit are in rural areas. And everyone getting the tax credit works: this is a tax break for folks who are employed — sometimes with more than one job.
People forget that the federal EITC was patterned after a proposal from conservative economist Milton Friedman, first proposed by Republican President Richard Nixon, signed into law under Republican President Gerald Ford and extended by fellow GOP President Ronald Reagan. And many Republicans, including U.S. Rep. Paul Ryan, R-Wis., have supported its expansion.
A state EITC enhances the effect of the federal credit, and research has shown that for every $3,000 a year in added income a family gets, their working hours increase by 135 hours a year between the ages of 25 to 37, and their annual earnings increase by 17 percent.
That’s because the EITC turbocharges what these families are already making, helping them to stay employed and keep on working. Each day of work provides more income, security and yes, dignity, for them.
We talk about respecting the value of work all the time in our state. Let’s show workers we actually mean it. It’s time to fast-track the Colorado EITC.
Sam Gary is a Colorado oil and gas entrepreneur and founder of Gary Community Investments, which includes The Piton Foundation.
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