A new study examining 2018 data found 38 percent of Connecticut households lacked enough income to afford basic necessities before the onset of the coronavirus pandemic.
The United Way of Connecticut’s biannual ALICE report, released this week, found that of the state’s 1.37 million households, 146,552, or 11 percent, earned below the federal poverty level in 2018. Another 367,175 households, or 27 percent, were considered “ALICE” houses, meaning they did not fall below the federal poverty line, and therefore did not qualify for public assistance, but did not earn enough income to afford basic necessities. The acronym stands for “Asset Limited, Income Constrained, Employed.”
The 2018 data also showed that a growing number of households in Connecticut, 13 percent, are on the cusp of becoming an “ALICE household.” The report does not account for economic impacts brought on by the pandemic.
“Despite working hard, many ALICE workers are not able to earn enough to keep pace with the high cost of living in Connecticut and the COVID-19 pandemic has exposed just how many families are walking a financial tightrope,” said Richard Porth, CEO of the United Way of Connecticut.
It’s “very reasonable” to assume the number of ALICE households will increase as a result of the pandemic, said Maria Campos-Harlow, executive director of the United Way of Meriden-Wallingford. Many ALICE workers have lower-paying jobs in industries hit hard by the pandemic, child care, restaurants, and hospitality.
“The ALICE population is always one paycheck away from falling behind,” Campos-Harlow said.
The biannual report pulls data from a variety of sources to determine whether households can afford the minimal costs for basic needs, including housing, child care, food, transportation, health care, technology, taxes and a contingency fund equal to 10 percent of annual spending. Household essential budgets were adjusted for geography and a number of demographic factors, with average budgets of $29,908 for a single adult, $31,752 for a single senior, and $90,660 for a family of four.
The United Way of Connecticut releases a new report every two years and uses the findings to guide programs, initiatives and advocacy. Here is an overview of the 39-page report:Local numbers
Of the 169 towns and cities in Connecticut, 148 have at least one in five households below the state’s basic cost of living, which the reports refers to as the ALICE threshold. Locally, 49 percent of households in Meriden are either below the poverty line or considered ALICE households.
Percentages from other surrounding suburbs include: 36 percent in Wallingford, 26 percent in Southington, 22 percent in Cheshire, 26 percent in Berlin, 37 percent in Plainville, 30 percent in North Haven, 17 percent in Durham, and 24 percent in Middlefield.
While the poverty level has remained relatively stable in local towns and around the state, Harlow-Campos said the percentage of ALICE households is climbing.Rising cost of living, child care deserts
Researchers and advocates say the state’s high cost of living, particularly the high cost of housing and childcare, are pushing more and more households into the ALICE category because their income isn’t keeping pace. Campos-Harlow noted housing and childcare alone makes up an estimated 42 percent of the average budget for an ALICE household.
“That is pretty significant,” Campos-Harlow said about that percentage. “It’s just very hard when you’re doing all the right things, you’re working, you’re trying to provide for your family, but the cost of life is so high, so no matter what you do, you’re behind. It’s just heartbreaking, and so many people are in that situation.”
In urban areas, housing costs are rising due to “population growth and increasing demand for low-cost, urban rental units,” the report states, adding “this trend will continue as affordable housing becomes hard to find.”
The report notes that the number of families with children fell 9 percent in Connecticut from 2010 to 2018, which could make it harder for child care providers to stay afloat. Since the onset of the coronavirus pandemic, childcare advocates around the state and country have sounded alarms that the industry could be headed for financial collapse without any government bailout. If childcare centers go out of businesses, it will make child care harder to find and more expensive, especially in less populated areas, the report states.
In Connecticut, 44 percent of families live in a child care desert, defined as having no child care providers at all, or so few options that there are three times as many children for each available licensed child care slot, the report states. Growing racial disparities
The latest ALICE report found a disproportionately high percentage of Black and Hispanic households live below the ALICE threshold. More than half of Black households, 57 percent, and Hispanic households, 63 percent, live below the ALICE threshold, higher than the statewide average of 38 percent.
This racial disparity has existed since the recession of 2008 and has grown over the past decade, Porth said during a recent press conference.
“Households across the state were affected by that recession, but it appears white households recovered faster and to a greater degree,” Porth said. “Black and Latino households actually lost ground over the last ten years or so. That, in my opinion, is an alarming finding.”
Since 2010, the number of black households in Connecticut below the ALICE threshold has increased by 11 percent, while the number of white households struggling to make ends meet decreased by 10 percent, according to Porth.
“Something’s wrong there,” Porth said about the widening disparity, “and we want to call that out and ask for help across the whole government, business [sector], community leaders and others to figure out how we can do better.”