Before the COVID-19 pandemic arrived this year, more than one-third of Connecticut residents already were struggling to make ends meet. It goes without saying that this pandemic has certainly not made things any easier.
As an update to the 2018 ALICE report, Connecticut United Ways look at ALICE (asset limited, income constrained employed) individuals and families to gauge who falls into this population, especially vulnerable to homelessness and financial insecurity.
The new report concludes that before the pandemic’s onset, 38 percent of Connecticut households lacked the income to pay for necessities such as housing, food, child care, health care, technology and transportation. That number includes those families living at or below the federal poverty level (FPL) and the 27 percent who live above the FPL but below the basic cost of living threshold.
The updated 2020 Connecticut United Way’s ALICE Report documents the challenges facing ALICE families throughout our state and identifies trends that affect ALICE’s ability to achieve financial security. In Middlesex County, 14,778 households fall under the ALICE criteria, approximately 25 percent of all Middlesex County households.
The report further demonstrates the now-exacerbated economic vulnerability of many Connecticut residents, who, in addition to dealing with longstanding financial challenges, now also are struggling with furloughs, job losses and an inability to pay bills and provide for their families.
The report uses data from a variety of sources, including the U.S. Census and the American Community Survey, to quantify the households in Connecticut’s workforce that are struggling in this way.
The 2020 Connecticut ALICE Report takes a deep dive into the growing financial challenges that require more and more families to make tough choices every day as they manage their household budgets. Consider these findings, which were made prior to the pandemic, in the new ALICE Report:
— 38 percent of Connecticut households (513,727) cannot afford the basics of housing, food, health care, child care and transportation. (This includes both ALICE households and those below the poverty line.)
— Despite working hard, 27 percent of Connecticut households (367,175) have incomes above the federal poverty level but below the ALICE threshold.
— In 148 of Connecticut’s 169 towns and cities, at least 1 in 5 households is below the ALICE threshold.
— It now costs more than $90,000 a year for a family of four with one infant and one toddler to pay for the basic needs in the ALICE Household Survival Budget.
— Connecticut’s high cost of living is a big part of the ALICE story, especially for housing and child care.
— 55 percent of jobs in Connecticut pay $20 per hour or more, which is among the highest in the country, but only two of the top 20 occupations in Connecticut (in terms of number of jobs) pays enough to support the ALICE Household Survival Budget for a family of four.
— 52 percent of workers in Connecticut are paid hourly. These workers are more likely to have fluctuations in income, with frequent schedule changes and variations in the number of hours available for work each week/month.
In addition, the new ALICE Report reveals the following trends affecting ALICE:
— A disproportionately high percentage of Black and Hispanic households live below the ALICE threshold (57 percent of Black households and 63 percent of Hispanic households).
— Many jobs will require an increasing ability to incorporate new technologies, work with data, and make data-based decisions, which means that ALICE workers need more access to upskilling, on-the-job training and work-based training opportunities, consistent with the direction Gov. Ned Lamont’s Workforce Council is taking.
— ALICE families are more vulnerable to an emergency because it is becoming more difficult to save and build assets.
With the release of the fourth Connecticut ALICE Report and the unprecedented human and economic loss brought by COVID-19, Connecticut United Ways continue to work toward short- and long-term solutions that provide a hand up for ALICE families and strengthen our communities.
To address the COVID-19 impact, Connecticut United Ways launched the COVID-19 Response Fund at the beginning of the COVID-19 pandemic. The fund is working in tandem with other philanthropic efforts being coordinated statewide and is rapidly deploying financial resources to members of ALICE households who have been economically affected by the pandemic, including those who are out of work or have reduced work hours.
Connecticut’s United Ways are helping working families to increase their financial security and build their assets and savings. Together, Connecticut’s United Ways launched ALICE Saves, an initiative that offers monetary rewards and other incentives for savers and provides them with free financial coaching. To learn more, visit ctalicesaves.org.
To help ALICE families file their taxes without unnecessary cost, Middlesex United Way provides support to the Volunteer Income Tax Assistance program. This program helps low- to moderate-income families file their taxes for free and receive a tax refund, including the tax credits for which they are eligible. It is important to know that low- to moderate-income families often do not file a tax refund, and money that they have earned is not refunded to them.
The 2020 Connecticut ALICE Report is sponsored by The Hartford, Xerox, and Connecticut’s 16 United Ways. For more information or to find data about ALICE in local communities, visit http://alice.ctunitedway.org. To learn more about efforts being made to help the ALICE population in Middlesex County and our financial stability work, visit www.middlesexunitedway.org.
Kevin Wilhelm is president and CEO of Middlesex United Way in Middletown.