Inflation and Colorado’s Middle Class

Inflation and Colorado's Middle Class

After decades of modest inflation, the United States economy experienced rapid price growth beginning in 2021. While the causes for this phenomenon are numerous, an important upshot is that both personal and governmental budgets were stressed as a result of higher costs.

Though inflation affects everyone, it also affects everyone differently. Its repercussions remain highly context-dependent, with major differences across geography, income level, race and ethnicity, or age. Recognizing these differences, the following briefs explore inflation’s specific impacts in Colorado.

Part one provides a basic primer on what inflation is and some of the different ways it’s measured.

Part two offers a deep dive into inflation’s impacts in our state. This includes an examination of how inflation in Colorado compares to the national experience. It also explores how inflation differs across income groups –with a particular focus on households entering or trying to remain in the middle class.

Part three examines inflation’s impact on the ability of Colorado’s public sector to provide services–especially in light of TABOR and constitutional restrictions.

Media & Press

According to a new analysis by two University of Colorado Denver professors, inflation has disproportionately affected lower-income Coloradans, increasing their spending on essential services at rates far higher than wealthier residents. The review, commissioned by the Bell Policy Center, shows how lower-income earners have struggled to adjust their spending or offset rising costs over the past two years, while essential spending on items like shelter or groceries has increased at higher rates for those Coloradans than their wealthier peers. The report’s authors argue that the disproportionate impact of rising costs calls for a targeted and nuanced approach that acknowledges the unequal burden. Scott Wasserman, the president of Bell Policy, said lower-income residents are getting “hammered” by inflation and that has implications for the entire economy.