Report: Even before COVID-19, 38% of Connecticut households struggled to make ends meet
In 2018, 38% of households in Connecticut and 33% in New London County didn't earn enough to afford basic necessities, according to the newly released 2020 ALICE Report — Asset Limited, Income Constrained, Employed — from Connecticut United Ways.
The report also noted that 13% of Connecticut residents are on the cusp of being ALICE, meaning that an emergency or disaster "could destabilize a large number of households."
The report "really kind of drives home just how vulnerable this population is, and now you couple it with (COVID-19)? With this pandemic? That is really going to rock our foundation in New London County," commented Dina Sears-Graves, vice president of community impact for United Way of Southeastern Connecticut.
The report that will be released in 2022, using 2020 data, will show the impact of COVID-19.
United Way of Connecticut releases the report every two years to highlight the people who are above the federal poverty level — $12,140 for a single adult and $25,100 for a family of four — and therefore don't qualify for some assistance programs but still struggle to make ends meet.
The 38% figure comes from adding the 11% of households below the federal poverty level to the 27% that are ALICE.
"ALICE households earn too much to qualify as 'poor' but are still unable to make ends meet," the report said. "They often work as cashiers, nursing assistants, office clerks, servers, laborers, and security guards. These types of jobs are vital to keeping Connecticut's economy running smoothly, but they do not provide adequate wages to cover the basics."
The United Way has a "Household Survival Budget" that shows how much money people need to afford housing, child care, food, transportation, health care and technology, plus taxes and a miscellaneous contingency fund equal to 10% of the budget.
The total is $28,908 a year for a single adult, requiring an hourly wage of $14.45, or $90,660 for a family that consists of two adults, one infant and one preschooler.
The report noted that the median hourly wage for a cashier, the most common job in Connecticut, was $11.49 in 2018. The minimum wage rose to $12 an hour on Sept. 1, 2020.
New to the report this year, United Way added a budget specifically for seniors, which reflects food and transportation costs that are slightly lower than that of a single adult but health care costs that are more than double.
The report highlights three trends: The cost of the aforementioned essentials increased at an average annual rate of 3.4% nationwide from 2007 to 2018 while inflation increased only by 1.8%, low unemployment in 2018 hid the risk of low-wage jobs increasing and wages remaining stagnant, and the number of ALICE households in Connecticut increased 40% from 2007 to 2018.
During this period, low-wage jobs increased by 34%, medium-wage jobs decreased by 3% and high-wage jobs decreased by 46%, the report said. The unemployment rate was 4% in 2018.
The types of households that make up a disproportionately high share of ALICE are those headed by a single woman with children, 73%; under 25 years old, 68%; Hispanic, 63%, and Black, 57%.
How will United Way utilize this information?
In a call with media last week, Waterbury resident Latesha Burton talked about her experience as part of an ALICE household. She works 40 hours a week as a client manager for an accounting firm, while her husband has an inconsistent, part-time schedule at a grocery store, and they have two children in elementary school.
The family is still paying off the bill from her husband's emergency room visit last year, and with COVID-19, Burton was working from home and helping her kids with schoolwork in the spring.
"It was so stressful. I felt like a failure to my kids and to my job," she said.
Burton said she and her friends who are ALICE "agree that we make a little more than the federal wage guidelines to receive assistance, but too little to thrive in this economy. The assistance that is available is not very much help."
Catherine Connelly, director of research engagement at United for ALICE, noted that Connecticut's share of ALICE households increased from 28% in 2007 to 38% in 2010. That means that even before the coronavirus hit, the state had not rebounded from the Great Recession.
For the report, researchers used data from the U.S. Census Bureau, Department of Housing and Urban Development, AAA, Feeding America, Consumer Reports and more. The methodology can be found at unitedforalice.org/methodology.
Dina Sears-Graves, of the United Way of Southeastern Connecticut, said it's hard to tell from the report alone who these people are and who is moving in or out of the ALICE categorization, but the lack of overall change is discouraging.
For the people who are above the poverty line but still ALICE, Sears-Graves noted that at least the pandemic has made some organizations soften their eligibility requirements for benefits.
She said the United Way of Southeastern Connecticut is focused on educating people about what resources are available to them. She also said the organization has committed $100,000 to its new COVID-19 Relief Fund for ALICE, in which ALICE families can get $200.
"$200 isn't going to save the day, per se, but I can tell you it does make a difference," Sears-Graves said.
Richard Porth, CEO of United Way of Connecticut, said part of the ALICE initiative involves helping people "understand the challenges that go with being an ALICE family, to help people walk in ALICE's shoes."
Porth also said that with more jobs requiring new technologies and data work in the future, part of United Way's strategy will be helping ALICE workers access more opportunities for "upskilling."