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The Gap Between Working Hard and Doing Better

Groundbreaking statewide ALICE Report finds 35% of Connecticut households can barely afford life's necessities

The American Dream is that if you work hard, you can expect to get ahead financially. For most of us, that means you can save money; buy a reliable car; purchase a home if you want; afford quality childcare; send your children to college; handle unexpected expenses; pay for your family’s health care; and take family vacations.

But the promise of the American Dream is slipping away for many hard-working Connecticut families. Increasingly, hard work alone may not buy you a ticket into the middle-class and a chance to live the American Dream.

This growing challenge is documented in Connecticut United Ways’ recently released in-depth study of the financial hardship faced by many working families throughout our state. The study reports that 35 percent of Connecticut households can barely afford life’s necessities. This number of households far exceeds the number of households identified by the official federal poverty statistics. We have known that about 10 percent of Connecticut households live in poverty, but we have overlooked the 25 percent of households with income above the Federal Poverty Level but below the state’s basic cost-of-living threshold defined in the United Way report.

United Way calls this often overlooked population ALICE, an acronym for Asset Limited, Income Constrained, Employed.

The United Ways in Connecticut produced this report in partnership with United Ways in five other states (California, Florida, Indiana, Michigan, and New Jersey), with Rutgers University conducting the research. The purpose of the study is to raise awareness of the plight of the ALICE population and to encourage short-term and long-term strategies that promote financial stability for many Connecticut households.

The reality that Connecticut has a higher percentage of affluent individuals and families than most other states often overshadows the fact that far too many residents face a very different reality – and that far too many of us are unaware of how this affects the overall social and economic viability of our communities.

ALICE represents the men and women in Connecticut’s households of all ages and races who get up each day to go to work, but who aren’t sure if they’ll be able to make ends meet. ALICE is our friends, neighbors, co-workers and relatives. ALICE does essential work that we depend on, and contributes to our community’s well being. The ALICE Report shines a light on the challenges facing people who play a vital role in preserving our state’s overall social and economic cohesion.

ALICE’s insufficient income is a bigger problem than we may realize. Unable to afford or get easy access to health care, ALICE may be a frequent user of the emergency room for health problems that could have been prevented. Unable to afford high-quality preschool, ALICE’s children may require additional help later in school. The loss of a job may mean that, with no savings to fall back on, ALICE may need government help to pay for rent or food. Or, if ALICE is a homeowner, they may go into foreclosure. These are devastating problems for a family but these issues also have a broader impact on health insurance premiums, taxes, neighborhood stability, and economic growth.

The ALICE study reports that the annual household survival budget for the average family of four (two adults, one toddler and one infant) in Connecticut is $64,689 and for a single adult it is $21,944. Even with one of the highest median hourly wages in the country, 51 percent of jobs in Connecticut pay less than $20/hour ($40,000/year if full time).

ALICE does essential work in our community such as child care, health care, security, and retail services. ALICE fixes our cars, takes care of our aging parents, supports our students as a teaching assistant in our schools, handles important tasks in the office, and provides customer service in our restaurants and grocery stores. Despite the importance of this work, it is a struggle to survive on what these jobs typically pay.

We all have a vested interest in improving conditions for ALICE. Just as effects of ALICE households’ everyday hardship ripple throughout our communities, so too will the effects of helping ALICE get ahead.

To reclaim the American Dream for all hard-working Connecticut families, there needs to be a much broader public awareness and knowledge of the challenges faced by the ALICE population as well as widespread support for the policies and practices that can keep ALICE families in the middle class – or lift them back into the middle class. A good place to start learning more about the ALICE population and its relevance to Connecticut’s overall economic health is by reading ALICE: A Study of Financial Hardship in Connecticut at http://alice.uwsect.org.