2018’s Big Ideas About Economic Mobility
The conversation about our unequal economy is an urgent one. That’s why we spent 2018 working to move it forward by keeping people on their toes — each and every new research product or advocacy campaign we shared this year represented an idea we want Coloradans to chew on and react to.
These are the biggest of those ideas. Whether you agree or disagree with them, we hope you’ll think about them, discuss them, and, hopefully, act on them. Ideas, after all, aren’t meant to sit in an inbox; they should take on a life of their own and change lives long after they’ve been born.
1. Four Forces Are at Work in Our Economy: Inequality, Public Investment, Demographics, & Technology
At first, these four forces just seemed like a great way to organize our Guide to Economic Mobility. But the more we thought about it, these topics became a way to organize all of our work, including how we present our mission, how we talk about the challenges and opportunities ahead, and how we can help every Coloradan break a very large challenge into more digestible pieces. A state that’s getting more diverse and older requires us to do more to close educational attainment gaps and prepare our communities for the new needs that come with age. Changes in technology require bold new thinking about rewiring an economy that has relied on systems fashioned around 20th century needs. Inequality requires more attention to the circumstances families find themselves in and greater focus on a fair tax code. As we tackle each of these dynamics, the lack of adequate public resources to take solutions to scale is painfully evident.
2. Our Middle Class is Shrinking & Becoming More Exclusive
When we asked “How much do you need to make to be in Colorado’s middle class?” in a Denver Post op-ed, more than 25,000 people wanted to know more. In the subsequent report we produced with our partners at CU Denver School of Public Affairs, we learned costs like child care, higher education, housing, and health care are weighing us down. These opportunities — once staples of middle class life — now represent a basket of life-changing must-haves with a growing price tag. To afford them, families must earn another $20,000 per year. The end result is a middle class that’s becoming an exclusive club that scores people’s circumstances harshly against their admission.
But an economy’s health is about more than GDP and unemployment. We need to ask just how many of us are squeaking by and how many of us are truly getting to live the Colorado way of life. That’s why we think a middle class dashboard for Colorado’s next governor will ensure we reopen the middle class for every Coloradan regardless of the circumstance they are born into.
3. Tomorrow’s Economy Will Look Different Than Today’s — So Should Our Social Insurance System
You don’t need to read one of our reports to know the robots and algorithms are coming. The question isn’t whether or not the future will be drastically different; it’s what we’re going to do about it.
Not only do we need large-scale innovations in education and training, we also need new systems that enable people to withstand dramatic changes brought on by the economy of tomorrow. As the gig economy and automation take hold, changing how and where we work, portable benefits will be crucial to protecting workers.
States are already rapidly adopting solutions to meet the moment. These include auto-enroll retirement accounts that can be used with any employer; paid family leave insurance to make sure you have the work life balance you deserve; and improved health coverage options that don’t rely on your job status. Untying benefits like health care and retirement savings from employment allow people to work rather than worry.
What we must focus on is making sure these benefits work for a job with Uber, a career with Amazon, an entrepreneur’s new venture, or any of the myriad jobs in between.
4. Wages Need to Rise Faster, Especially for Those Working Overtime & Who Care for Children & Older Adults
At the beginning of the year, wage growth was virtually stagnant and was far outpaced by inflation and other rising costs. By the middle of the year, we began to see average wage numbers creep up, but we asked, “Who’s seeing that pay bump?”
The answer that came back shows while wages for the bottom and very top moved up, the middle occupations continued to lag behind. National data show even though there’s been improvement, we’re only now catching up to pre-recession levels when adjusted for inflation.
Beyond these relative measures, it should haunt us all the wages for those who are working in the most crucial and on-demand sectors, like child care and long-term care, are languishing at the bottom of the pay scale. An experienced child care worker makes just $30,000 per year, while home health aides make 5 percent less than they did in 2000, when adjusting for inflation.
5. The Message of Lower Taxes & Shrinking Government Rings Hollow As Inequality & Costs Rise
Pundit after pundit says Colorado’s tax measures were “soundly defeated” at the ballot. I’m not sure what results they’re looking at, because 2018 was the first time a non-sin tax measure got within striking distance of 50 percent. Amendment 73, a progressive tax increase for education, obtained 46 percent of the vote, all done with no money and an army of volunteers. In the governor’s race, we saw a candidate who trotted out the stale message of “less government and more freedom” get crushed at the ballot box. Both of these results confirm Coloradans are growing sick of getting left behind when the economy’s booming. Let’s stop talking TABOR and Gallagher, and start envisioning what a new tax system that accounts for inequality and adequate public services could look like.
6. The Public Has a Strong Sense of Fairness & Demands a Crack Down on Financial Exploitation
Proposition 111, the 36 percent APR rate cap on payday loans, earned the highest win margin in the state’s history of citizen-initiated ballot measures — a proposal the state legislature scoffed at in 2010 passed eight years later at 77 percent. Why? Voters understand economic fairness and financial exploitation is unacceptable. And it’s not just payday lenders they find abhorrent — all of us now see our student debt crisis is a real drag on the economic activity of the next generation. With the Consumer Financial Protection Bureau (CFPB) being torn down in Washington, Colorado needs to start picking up the slack. We can start with regulating student debt loan servicers and for-profit colleges.
7. Progressives Now Have a Chance to Govern in Colorado & Will Be Evaluated on How They Deliver on Their Promises, Not on a Politically Contrived Charge of “Overreach”
A week before the election, a friend sat down in my office and said, “We’ve got to start dealing with this ‘overreach’ thing.” That was the first time I heard that horrible phrase in 2018. Now, I hear it at least three times a day. When I hear it explained to me, what it really sounds like is a code word for making sure we don’t do too much to fix our economy too quickly, and the ideas organizations like mine spend their time researching and advocating for shouldn’t be taken too seriously. After all, there’s a status quo to be maintained.
8. Colorado’s 2018 Election Wasn’t Just About Trump; It Was About an Ideology That Fell Short on Ideas to Ensure Every Coloradan Thrives
I’ve so far managed to write a year-end wrap up for 2018 without ever mentioning the “T” word. There’s no question the blue tsunami we saw in Colorado was a repudiation of Donald Trump, a rejection of politicians who refused to stand up to him, and, more importantly, Trump’s policies wreaking havoc on opportunity across the nation. But this wasn’t just about Trump. Coloradans voted for individual candidates who ran on powerful progressive ideas for how to solve very specific problems in our economy. Many of those are the problems we’re working on solving at the Bell Policy Center.
Here in Colorado, 2019 brings hope that we can now turn these ideas into action. A newly elected legislature and governor have the opportunity to act with the knowledge that the public wants meaningful change. We understand that that this also means that many of these ideas will be tested. The new year will bring new data, new counter proposals proposals, and new innovations. A new cycle of ideas will begin.
What were your big ideas from 2018? What trends and themes did you see in Colorado or your own state? This coming year, we invite you to join our community of ideas and action we’re building here at the Bell Policy Center. Because the biggest idea of all is that when we work together, we can get the American Dream back on track for generations to come.
