You know ALICE. ALICE prepares your food at your favorite restaurant and then brings it out to your table. ALICE cleans your kid’s school and occasionally your house.
ALICE isn’t a person, but all the people who help make your life a little better even if their jobs never make their lives better, or help them get a peek at the American Dream.
ALICE is an acronym the United Way of Connecticut is using to describe households that are “Asset Limited, Income Constrained, Employed.” The agency has issued a new report that shows that nearly half a million state households, or 35 percent, struggle to pay for five survival basics: housing, child care, food, healthcare and transportation.
And many of those struggling households are in New Haven, and New Haven County. Of the largest municipalities in the state, only Hartford and New Britain have a greater percentage of households that cannot cover the five basics for survival. Of New Haven’s 51,078 households identified in the 2012 American Community Survey, an estimated 58 percent are households that do not generate enough income to cover their basic needs.
A Real Struggle
New Haven County doesn’t fare much better as a whole in the report, which estimates that 45 percent of the county’s 330,054 households don’t make enough to cover basic survival needs.
According to the report, the annual Household Survival Budget for the average Connecticut family of four is $64,689 and for a single adult is $21,944, far more than what the antiquated federal poverty guidelines consider adequate at $23,050 for a family, and $11,170 for a single adult.
In fact, the report indicates that to live in New Haven County, people need even more to survive — an estimated $66,899 for a family of four and $24,181 for a single adult.
In the report, New Haven County economic viability indicators for housing affordability, job opportunity and community support are likely putting additional pressures on ALICE households where people have low wage/low skill jobs and no financial safety net for emergencies. New Haven County was ranked fair for its housing affordability, poor for its job opportunity and fair for its community support.
Tough Choices
If you are an ALICE household, the report indicates that you are more likely to be a renter who has less access to early childhood education, less access to preventative care, enduring longer commutes and more likely to be absent from work because of health problems. All of these factors impact non-ALICE households when it comes to everything from higher health and auto insurance costs to lost productivity at work.
Rick Porth, president and CEO of United Way of Connecticut, said the study was produced to create a clearer picture of who is struggling in the state, why they’re struggling, the consequences for all the state’s residents and what can be done. He said ALICE households are often left out of discussions about poverty because they often don’t meet the federal definition for poverty, and because they work and might not be eligible for government assistance. Organizations like the United Way provide short-term assistance that help fills the gap, and the gap is huge according to the report.
Stephanie Hoopes Halpin, assistant professor at the School of Public Affairs, Rutgers University-Newark and lead researcher and author of the ALICE Report, said oftentimes ALICE households are one emergency away from being plunged into financial crisis that forces them to make hard financial choices.
“One significant illness can send ALICE households budgets in a tailspin,” she said.
The report further points out that the Household Survival Budget only covers the aforementioned five basics, and is a “bare-minimum budget, not a ‘get-ahead’ budget” that covers saving for a down payment on a house or even an emergency.
“Reaching beyond the Household Survival Budget, the Household Stability Budget is a measure of how much income is needed to support and sustain an economically viable household,” the report’s authors wrote. “In Connecticut, the Household Stability Budget is $111,632 per year for a family of four – 73 percent higher than the Household Survival Budget.”
Susan Dunn, president and CEO of United Way of Central and Northeastern Connecticut, praised the state for raising the minimum wage to $10.10 in 2017, and the strides its made to advance early childhood education, but she said there is still more to do.
According to the report, Connecticut already has one of the highest median hourly wages in the country, but 51 percent of jobs in the state pay less than $20 an hour. In fact the majority of the jobs pay $10-$10 an hour.
“A full-time job that pays $20 per hour, grosses $40,000 per year, which is less than the Household Survival Budget for a family of four in Connecticut,” the report’s authors wrote.
Like many states in the United States, Connecticut has seen manufacturing jobs dwindle, sweeping away jobs that provided stable, liveable wages, but required little to no education or specific skill. Those jobs have been replaced by low wage/low skill jobs that don’t cover the basic costs of living, according to the report.
Short & Long-term Solutions Needed
Dunn said improvement in job opportunities by not only raising wages, but attracting more businesses that provide medium-to high-skill jobs in the public and private sector are the kind of long-term intervention needed for ALICE families. Central to the plight of ALICE households is that they simply don’t make enough money at a time when the cost of basic expenses are more than what most jobs in the state pay; when the cost of living continues to increase; and the demand for affordable housing continues to outpace supply.
The report also validates the work of organizations like the United Way and the generosity of individuals who help make up the shortfall that many ALICE households face because their income only covers 41 percent of the cost of their basic needs.
“Short-term intervention by family, employers, nonprofits, and government can be essential to supporting a household through a crisis and preventing a downward spiral to homelessness,” report authors wrote. “The chief value of short term measures is in the stability that they provide; food pantries, TANF, utility assistance, emergency housing repairs, and child care subsidies all help stabilize ALICE households, potentially preventing much larger future costs.”
But the report also seeks to remind policymakers that improvement in financial stability for ALICE families depends a lot on making systemic changes.
“Broad improvement in financial stability is dependent upon changes to the housing market and the health care delivery system,” report authors wrote. “Investments in transportation infrastructure, affordable quality child care, and healthy living would also help.”
The lower class is screwed because the mythological job creators won't pay them enough to live, and the upper class is screwed because more of the tax base is being pushed onto them because the job creators won't pay the poor enough money to live. The very upper echelons of income though are living it up.