Metro Area Sees Rising Living Costs, Falling Wages
A new report from left-leaning policy group the Colorado Fiscal Institute alleges the metro Denver area is becoming increasingly costly for lower-wage workers. The report uses liberal economic policy group the Economic Policy Institute’s cost-of-living calculator as a way to measure necessary living wages for a single worker in Denver and the surrounding area. The CFI’s report suggests a single person needs an annual wage of $28,829, or $13.88 per hour for a 40-hour work week, in order to afford to live in the Denver area. The report found that several types of occupations routinely pay below $13.88 per hour. For instance, a dishwasher makes a median $9.17 per hour and would need to work 61 hours per week. The average cashier would need a 60-hour work week, while child care workers would need to work at least 47 hours each week.
In addition to noting that some types of jobs routinely pay under the average wage needed for a 40-hour work week, the number of area jobs that pay less than $13.88 per hour has increased, from 27% in 2001 to 30.5% today. In one example, the report found that there are 250% as many home health aides in the area as in 2001, but wages for that job are down 22% over the past 14 years. There are almost 200% more food prep and service workers than in 2001, but their wages are now only 90% of 2001 levels. Even jobs consider in high demand and more skilled, such as plumbing and carpentry, have seen wage declines during that period.
At the same time, Denver’s average apartment rents rose from $822 per month in 2001 to $1,203 in the first three months of 2015, about a 14% increase when adjusted for inflation. The EPI cost-of-living calculator used in this report estimates a single metro Denver resident now spends $7,200 annually on shelter costs.
What This Means For Small Businesses
Although a happy, healthy workforce is key for any small business, employers are increasingly faced with pressure to boost wages as costs of shelter, food, and other daily expenses rise. Reports such as this latest from the Colorado Fiscal Institute add to the growing chorus urging small businesses to absorb additional costs, despite the fact that they, too, face added pressure from rising costs.
Additional Reading
The Denver Post covers the report.
