DANBURY, CT (September 19, 2023) – The number of area households unable to afford the basics grew during the first two years of the COVID-19 pandemic. By 2021, a total of 131,446 households or 40% of households in the 27 towns of the coastal and western Connecticut region were struggling to make ends meet, according to a new report from Connecticut United Ways and its research partner United For ALICE.
These families, defined as ALICE® (Asset Limited, Income Constrained, Employed), earn above the Federal Poverty Level but less than what’s needed to survive in the current economy. ALICE families have been overlooked and undercounted by traditional poverty measures. ALICE is the nation’s child care workers, home health aides and cashiers heralded during the pandemic — those working low-wage jobs, with little or no savings and one emergency away from poverty.
ALICE in the Crosscurrents: COVID and Financial Hardship in Connecticut shows that the total number of financially insecure households in Connecticut rose by 11% between 2019 and 2021 — almost triple the 4% increase in the state’s overall population.
In fact, Connecticut ranked 19th in financial hardship among all 50 states, with one of the nation’s highest percentages of households struggling to make ends meet in 2021.
According to the report, for a family of four with an infant and a preschooler, the annual ALICE Household Survival Budget, which is the basic cost needed to live and work in coastal and western Connecticut was $117,396 in 2021.
Even with the variety of temporary pandemic supports available, in 2021, a family of four with two full-time workers earning salaries as a retail salesperson and a cashier — two of the most common occupations in Connecticut — fell short of affording the family budget by $27,682.
Add inflation and the narrative shifts entirely. Inflation in Connecticut has long contributed to a structural economic problem: wages for jobs essential to the running of the economy are not high enough for workers to afford the household basics they need to support their families. For example, the cost of six household essentials in Connecticut has risen at a faster clip than inflation, leaving low-wage workers priced out of affording the basics.
Using the ALICE Essential’s Index, which tracks the rising cost of essentials, including housing, child care, food, health care, transportation, and a smartphone plan, and adjusting it for two years, from 2021 to today, yields a projected 18.2% rate of inflation in Connecticut. This translates into a projected annual state household survival budget of $126,018 and a projected hourly wage of $63/hour. In coastal and western Connecticut, this translates to an annual household survival budget of $138,739 and a projected wage of over $69 per hour.
As the costs of basics have climbed, wages for ALICE workers have failed to keep up. The result? Workers have lost buying power over the past 15 years. Workers in retail sales, (a common occupation in Connecticut), saw an average $42,500 loss of buying power — more than a full year’s earnings, according to findings within the ALICE Essentials Index.
“ALICE doesn’t buy power boats or hire landscapers — ALICE is doing the landscaping,” said Stephanie Hoopes, Ph.D., national director for United For ALICE, a U.S. research organization driving solutions to financial hardship. “ALICE is simply trying to afford safe housing and dinner on the table.”
To read the ALICE report and access online, interactive dashboards that provide data on financial hardship at the state, county, and local levels, visit United4ALICE.org/ALICECrosscurrents.
To learn more about the ALICE Essentials Index, and to explore the online dashboards, visit UnitedForALICE.org/Essentials-Index.