What Does It Take to Live a Middle Class Life? In Colorado, It’s More Than You Think.

They say the middle class lies at the heart of the American Dream, and it does, but what exactly does that mean? Six months ago, we set out to better understand what “middle class” really means in the state of Colorado.

In our pursuit, we discovered Colorado’s middle class is no longer the sprawling group that once prospered in this country. It’s now an exclusive club of well-educated, dual-earning households who can afford to keep pace with the mounting costs many of us drown in.

Underpinning our research was the notion that what truly distinguishes a middle class life from a self-sufficient one is the ability to afford a thriving life. In a thriving life, you are healthy and connected to others. You make plans and make choices. You can overcome life’s curveballs. Wealth — both material and social — can move on to the next generation. In short, you have the stability and security that breathes democratic life into a nation.

Under (Cost) Pressure

While we’ve certainly seen data estimating the number of middle class Americans, those figures are based purely on income. When you look at the makeup of our middle class from the perspective of actual costs we wrestle with, the numbers drop dramatically.

Here in Colorado, only 48 percent of families can afford a state-specific, expense-calculated middle class lifestyle. Of those, many are only hanging on by the skin of their teeth.

When accounting for Colorado’s costs, a middle income doesn’t cut it. In actuality, a middle class budget requires nearly $20,000 more than a typical middle income in Colorado, creating a new range of between $81,000 and $211,000 just to make ends meet. Without that, families are forced to make lose-lose tradeoffs, like cutting retirement or college savings, skimping on health care coverage, or opting for lower-quality child care.

Even with sacrifices, the fundamentals of middle class life are getting further out of reach for the majority of Coloradans. Our study documents an 85 percent increase in college expenses and a corresponding 349 percent increase in student debt since 2000. Health care costs are up 70 percent and housing by 35 percent. In contrast, incomes haven’t seen an uptick near those amounts. While news of 4.5 percent wage growth is welcome, it comes on the heels of only 3 percent growth since 2000, and still isn’t enough to cover the costs Colorado families face.

So, Who Is Today’s Middle Class?

Although the story of rising costs and a shrinking middle class isn’t necessarily new, the story of who can keep their head above water is. What we’ve discovered is revealing, and it’s essential our communities understand the implications.

Colorado’s current middle class is predominantly white, while Latino and black Coloradans are starkly underrepresented. As a state that will see Latinos comprise 60 percent of our workforce’s growth by 2050, this is particularly concerning. Colorado’s future literally depends upon diversifying the middle class, yet the research shows our state is headed in the opposite direction.

When it comes to family type, Coloradans had more kids and started families earlier in 2000. Back then, the birth rate was 15 per 1,000 residents, and parents had their first kid at 27 years old. Now, Colorado’s birth rate is down to 12 and first-time parents are closer to 30 years old. In fact, our research shows the majority of true middle class families have no children in the home. Is it possible so few of us can afford our own aspirations that the thought of adding another person into the mix just seems daunting?

Or maybe it’s just the time, effort, and resources it takes to join the middle class club isn’t conducive for raising a family. Our research shows a middle class life in Colorado requires two earners, at least one of whom pulls in a professional or managerial wage, along with a highly educated background: A quarter of middle-income families and nearly half of upper-income families in Colorado have at least one master’s degree.

Colorado’s Cautionary Tale

These dynamics are playing out across our country, but what’s happening in Colorado is a unique cautionary tale for our entire nation. Here, we see a befuddling contrast of a top economy with a shrinking middle class. This research points to an insidious explanation for why that is:

Coloradans have the hardest time affording the one thing that’s most critical to a diverse and thriving middle class — an education.

Institutions like quality child care, a strong K-12 experience, and an easily accessed career path continue to be the primary predictors of economic success, but when those things aren’t working, the next generation’s economic success is jeopardized, too. There are no silver bullets in our quest to rebuild the middle class. Solutions to this crisis include raising wages and securing more universal benefit systems, but restoring a vibrant education system lays a necessary foundation for so much of what we need to change. This foundation is missing in our state, and there’s no getting around the role that our state’s notoriously paltry investments in these institutions play.

This must change quickly. Inequality is already wreaking havoc in Colorado. The average income for the top 1 percent of Coloradans is $1.1 million, while the bottom 99 percent earn an average of $55,000. Ninety-two percent of Coloradans have an income below $150,000. If we don’t move more Coloradans toward a middle class life, fewer of us will have a voice when it comes to how our money is spent and how we build for the future. In essence, we’ll all be less free if these gaps persist.

Freedom, the American Dream, and the reality of a strong, sprawling middle class are essential to the American identity. When we grow our middle class and make it open to more of us, we are a healthier, more thriving country. When it shrinks and too many of us fall behind, we tear at each other and put our legacy — both as individuals and a nation — on the line.

At a time when Americans feel like something critical is missing, studies like this shed important light on what that could be. When we rebuild the American middle class, we rebuild America. We have the blueprint, now we just need follow it.

Read the report and its findings here, then share this piece to spread the word.

The Bell Policy Center provides policymakers, advocates, and the public with reliable resources to create a practical policy agenda that promotes economic mobility for every Coloradan.