More Connecticut households are struggling to pay for their most basic needs, according to a new report from United Way. More than one out of four households – in one of the wealthiest states in the U.S. – are employed, yet still fall below what is needed to thrive financially. That is an increase in both the number and percentage of such households in 2014 as compared with 2012, according to the updated ALICE report.
Two years ago, United Ways introduced ALICE, which stands for – Asset Limited Income Constrained Employed – to place a spotlight on a large population of residents who are working, but have difficulty affording the basic necessities of housing, food, child care, health care and transportation.
In those two years, the problem has grown worse, even has the recession has given way to a slow economic recovery, in Connecticut and nationwide. ALICE and poverty households combined account for 38 percent of households in the state that struggle to make ends meet.
A total of 361,521 Connecticut households fall into what the study describes as the ALICE population. These are households earning more than the official U.S. poverty level, but less than the basic cost of living. This is more than 2.5 times the number of households that fall below the federal poverty level. ALICE households make up 20% or more of all households in 114 (67%) of Connecticut’s 169 cities and towns.
The highest levels (ALICE and poverty households) were in Hartford (74%), New Haven (65%), Waterbury (63%), Bridgeport (63%) and New Britain (63%). Also above 50 percent are Meriden, West Haven, East Hartford and New London. From 2007 to 2014, two cities, Danbury and Waterbury, saw their total household population decrease, by 7 and 9 percent respectively, while the rest experienced an increase in households, with the largest increase of 8 percent in Stamford, according to the report. The number of household below the ALICE Threshold increased in every one of the nine largest cities and towns with Norwalk seeing the largest percent increase (38 percent).
While the prevalence of low-wage jobs still defines Connecticut’s economy for ALICE, for the first time in the past decade, the percent of jobs paying less than $20 per hour fell below 50 percent of all jobs. The report also highlights a number of trends in Connecticut, including:
- The population is aging, and many seniors do not have the resources they need to support themselves.
- Differences by race and ethnicity persist and ethnicity persist, creating challenges for many ALICE families, as well as for immigrants in Connecticut.
- Low-wage jobs are projected to grow faster than higher-wage jobs over the next decade.
- Technology is changing the workplace, adding some jobs, replacing many others, while also changing where people work, the hours they work, and skills required. The report notes that technology creates opportunities as well as challenges for ALICE workers.
For the first time, an online simulator is also available to experience the financial challenges that ALICE households in Connecticut face at www.MakingToughChoices.org. The updated Report uses data from a variety of sources, including the U.S. Census and the American Community Survey to provide tools that quantify the number of households in Connecticut’s workforce that are struggling financially. The updated United Way ALICE Report reveals:
- The composition of the ALICE population is men and women, young and old, of all races.
- The breakdown of jobs in Connecticut by hourly wage (51% of jobs pay more than $20/hour) compared to what it costs to survive for a family of four (2 adults, 1 infant, 1 preschooler) – $70,788.
- Every city and town in Connecticut has ALICE households. More than two-thirds of Connecticut’s cities and towns have at least 1 in 5 households that fit the ALICE definition for financial hardship.
Poverty and ALICE households exist in every racial and ethnic group in Connecticut, but the largest numbers are among White non-Hispanic households. There were about one million White households in 2014, compared to 328,000 households of color (Figure 4 shows the populations of color for whom there is income data: Hispanic, Black and Asian). However, these groups made up a proportionally larger share of households both in poverty and ALICE: 64 percent of Hispanic households, 58 percent of Black households, and 30 percent of Asian households had income below the ALICE Threshold in 2014, compared to 31 percent of White households.
The largest population of color in Connecticut, Hispanics, has been growing since 2007, totaling 156,837 households in 2014, a 25 percent increase. As the number of Hispanic households increased, so did the number and proportion of Hispanics living below the ALICE threshold. The percentage of Hispanic ALICE households rose from 34 percent in 2007 to 39 percent in 2010 and then to 43 percent in 2014. Together Hispanic households in poverty and ALICE made up more than two-thirds of Hispanic households in 2014.
There are some signs of improvement in the education gap among racial and ethnic groups, suggesting that some structural changes are occurring in Connecticut. In K-12 education, the Education Equality Index (EEI) shows that the achievement gap – the disparity in educational measures between socioeconomic and racial or ethnic groups – narrowed slightly between 2011 and 2014 in Connecticut.
Achievement gaps impact graduation rates and college performance. Among the Class of 2013, 64 percent of Black students and 59 percent of Hispanic students in the state went on to college within a year after graduating from high school, compared to 78 percent of White students. They also had lower 6-year college graduation rates: While 54 percent of White students got a college degree within 6 years, only 24 percent of Black students and 21 percent of Hispanic students did the same (Connecticut State Department of Education, 2015).
The updated ALICE Report recommends both short-term and long-term strategies to help ALICE families and strengthen our communities. United Ways work with many community partners to provide support to ALICE families to help them get through a crisis and avoid a downward spiral into even worse circumstances such as homelessness as well as assisting with financial literacy, education and workforce readiness.
Further, United Ways in Connecticut have invested more than $8.5 million in child care and early learning; $1.3 million in housing and homeless prevention work; $5 million in basic needs programs; and, have assisted working families in obtaining nearly $40 million in EITC and tax refunds and credits in 2016.
The updated Connecticut ALICE Report was funded by the 16 Connecticut United Ways. For more information or to find data about ALICE in local communities, visit http://alice.ctunitedway.org. Connecticut United Ways are joining with United Ways in fifteen other states to provide statewide ALICE Reports. The updated Connecticut ALICE Report provides analysis of how many households are struggling in every town, and what it costs to pay for basic necessities in different parts of the state (Household Survival Budget).
[2014 ALICE introductory video]