Colorado small business owners have a purchasing power that ranks in 40th place out of all 50 states.
A report from the Tax Foundation found that in Colorado $100 will get someone $97.09 of everyday goods.
The report writes, “It’s generally the case that states with higher nominal incomes also have higher price levels. This is because in places with higher incomes, the prices of finite resources like land get bid up… What is also true is that places with high costs of living pay higher salaries for the same jobs.”
This could have a few implications for small business owners on multiple levels. Most importantly, recognition of a low purchasing power for consumers could lead to major policy changes in the state to compensate.
“Many policies–like minimum wage, public benefits, and tax brackets–are denominated in dollars. But with different price levels in each state, the amounts aren’t equivalent in purchasing power,” according to the Tax Foundation’s report.
It’s not all bad news though, as business owners could use the report’s findings to consider when buying materials out of state might save them a few dollars.
States with the highest purchasing power were: Mississippi ($115.74), Alabama ($115.47), Arkansas ($115.07), West Virginia ($114.16), and Kentucky ($113.90).