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Report: 40 Percent of Connecticut Households Can’t Afford Basic Needs

by | Sep 4, 2018 3:00am () Comments | Commenting has expired | Share
Posted to: Business, Child Welfare, The Economy, Retail Sector, Nonprofits, Poverty

HARTFORD, CT — Connecticut may be one of the wealthiest states per capita in the nation, but that doesn’t necessarily paint the entire picture.

A new report from the United Way found there are 538,529 households or 40 percent of the population that can not afford basic needs, such as housing, food, health care, child care, technology and transportation.

Despite working hard, 30 percent of Connecticut households or 404,035 have earnings above the federal poverty line, but under a basic cost-of-living threshold, according to the United Ways ALICE report. ALICE is an acronym that stands for Asset Limited Income Constrained Employed.

The number of ALICE households increased from 352,699 in 2010 to 404,035 in 2016, the last year for which data is available. That’s an 11 percent increase in households that are struggling, but don’t necessarily qualify for government assistance such as Medicaid or food stamps.

Under the criteria developed by researchers, it costs nearly $78,000 a year for a family of four with one infant and one toddler to meet the basic needs in the ALICE household survival budget.

Paula Gilberto, president and CEO of United Way of Central and Northeastern Connecticut, said 45 percent of that basic budget for the above family of four is housing and childcare and childcare alone is the single largest expense at 26 percent of the overall budget.

The report shows that between 2010 and 2016 the cost of childcare for families has increased 13 percent. The cost of housing during that same time period increased 9 percent and the cost of healthcare increase 82 percent.

In Connecticut, most ALICE households don’t have three months of savings to cover living expenses and that poses a real risk to any financial emergency such as an illness or a car breaking down or a major appliance needing to be replaced.

Stephanie Hoopes, the lead researcher and director of the ALICE Project, said while the economy seems to be recovering, unemployment is at an all time low and the stock market is booming, this economic prosperity hasn’t “reached all households or at least not yet.”

“ALICE is increasing in the face of some good economic indicators,” Hoopes said.

She said one of the main drivers of that is an increase in the cost of household basics, which is up 16 percent for a single adult and 23 percent for a family of four.

The number of jobs isn’t increasing as fast as the cost of living, which accounts for the mismatch, Hoopes said.

She said the “top two jobs in Connecticut are retail sales and cashiers and they pay less than $12 an hour and you can’t support a family in Connecticut on that.”

Richard Porth, CEO of the United Way of Connecticut, said there’s a growing realization that the federal poverty level doesn’t fully detail the “real scope of financial hardship” families face.

He said that’s why the United Way got involved in creating the ALICE report. 

“We also hope to help people walk in ALICE’s shoes,” Porth said.

He said there’s an online stimulator to help people understand what it’s like.

“It’s a set of decisions you have to make to see how far you can get,” Porth said.

It’s located at www.makingtoughchoices.org

Porth said in Connecticut the household survival budget continues to increase.

He said the pay is better than some states, but there’s also a high cost of living in Connecticut, which makes things more difficult.

The report found 55 percent of jobs in Connecticut pay $20 an hour or more, which is among the highest in the country, but only one of the top 20 occupations in Connecticut (in terms of number of jobs) pays enough to support the household survival budget.

Another trend impacting family survival is the so-called gig economy.

In 2016,15 to 33 percent of the workforce worked as a consultant or contingent worker, temp, freelancer, or contractor within the so-called gig economy. As a result, more workers are experiencing gaps in employment and less regular schedules, and they are forgoing retirement plans, health insurance, and worker safety protections.

As far as population growth is concerned, migration of people from New York and Massachusetts, as well as immigration from abroad have been a primary driver behind Connecticut’s population growth. 

The total number of people moving into Connecticut increased from 97,500 in 2010 to 102,002 in 2016, a 5 percent increase. However, there was an even greater increase in the number of people across all age groups moving out of the state, rising from 89,360 in 2010 to 112,914 in 2016, a 26 percent increase.

The largest inflows and outflows are among college-age students, 18- to 24-year-olds, followed by those children under the age of 18 and their parents in their 30s. The groups with the greatest net flow out of the state were retirees, followed by 18- to 24-year-olds, and then 50- to 64-year-olds.

Foreign-born immigrants contribute greatly to population growth in Connecticut. In fact, without immigration, Connecticut population change would be negative overall in 2016.

Hoopes said an increase in Connecticut’s elderly population will be a challenge for the state. Connecticut’s elderly population is projected to grow from 506,559 or 14 percent in 2010 to 832,290 or 23 percent by 2040, a 64 percent increase.

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