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 co-workers, friends, and neighbors. ALICE does essential work that we depend on, and contributes to our community’s well-being.
ALICE: A STUDY OF THE MANY HARD WORKING, LOW-INCOME PEOPLE IN CONNECTICUT
In the fall of 2014, Connecticut United Ways released the first statewide ALICE Report, a data-driven, comprehensive research project that quantifies the situation confronting many low-income working families across our state – in our urban, suburban and rural communities. The initial ALICE reported aimed to “put a face” on working families in Connecticut. The 2014 ALICE Report served as a call to action for Connecticut United Ways as it revealed that that the number of Connecticut households unable to afford life’s basic necessities far exceeds the official federal poverty statistics. This demographic is known as ALICE, an acronym for Asset Limited, Income Constrained, Employed.
The recently released 2016 ALICE Update Report focuses on what has changed for ALICE households. Unfortunately, more families continue to struggle to make ends meet; the household survival budget continues to increase; and, wages are not keeping up with the cost of living in our state. The ALICE Update reinforces that ALICE is not isolated to an area code, age, gender or ethnicity. Families and individuals living in every town and city across the state are struggling financially and faced with difficult financial decision every day. Despite working hard, ALICE households are not able to afford basic necessities such as the housing, child care, transportation, healthcare and food.
The 2016 ALICE Update Report also identifies new trends that are impacting ALICE in the workplace. Advances in technology are creating new job possibilities for ALICE workers as well as threatening existing jobs. Currently, 5 percent (68,000) of Connecticut workers are employed in the technology sector. The increase in on-demand or project-to-project jobs has given rise to the “gig economy.” While these on-demand positions may create new employment opportunities, they offer ALICE workers limited job security, no benefits, fluctuating hours and unreliable wages.
ALICE’s vulnerability to financial shock is another trend identified in the 2016 ALICE Report. Asset limited is a defining characteristic of ALICE. Thirty-nine percent of households lack the liquid assets necessary to survive a financial shock. This vulnerability means that a medical emergency or unexpected car repair has the potential to cripple an ALICE household.
The 2016 ALICE Update Report shines a light on the challenges facing people who play a vital role in preserving our state’s overall social and economic well-being. While it is true that ALICE has existed long before this study, the Report provides a framework that goes beyond the data and demographics that quantify ALICE households, and allows us to meaningfully discuss solutions that make it easier for ALICE to get by and get ahead.
How Many Households are Struggling?
ALICE households earn more than the U.S. poverty level, but less than the ALICE Threshold. Combined, the households in poverty and ALICE households reveal the true size of the population struggling to afford basic needs. Below are the percentages of households below the federal poverty level, ALICE households, and all households below the ALICE Threshold in the United Way of Western Connecticut service area and in the state as a whole:
|United Way of Western Connecticut service area|
Shining a Light on a Hidden Population
Federal poverty definitions do not account for all of the hard-working people who face challenges making ends meet. The ALICE Report uses a new measure called the ALICE Threshold, to identify the true size of the population of people in Connecticut who do important work in our community and yet struggle to get by.
All of the towns in the region served by United Way of Western Connecticut are listed in the chart below, in order of the percentage of households below the ALICE Threshold. By hovering your cursor over each town, you can see the percentage of poverty households in each municipality, as well as the percentage of ALICE households. As you will see, ALICE lives in every community.
What Does It Cost to Afford the Basic Necessities?
The Household Survival Budget is a tool used to assess financial hardship for ALICE. It is calculated by using the bare minimum cost option for each of the five basic necessities to develop a monthly budget that covers the essentials plus taxes and a 10% miscellaneous contingency.
For a family of four to cover all of the costs in the Household Survival Budget, their annual income would need to be more than double the U.S. poverty threshold of $23,850. Even with one of the highest median hourly wages in the country, there are still many jobs in Connecticut that pay less than $20/hour ($40,000/year if full time). The table to the right shows that:
- 49% of jobs paid less than $20 per hour with two-thirds paying less than $15 per hour
- 37 % of jobs paid between $20 and $40 per hour
- 11% of jobs paid between $40 and $60 per hour
ALICE does essential work in our community – such as child care, health care, security, and retail services – yet often makes less than what it costs to get by.
|Household Survival Budget in Connecticut|
|Connecticut Average||Single Adult||Family of Four*||Western Connecticut Service Area Average||Single Adult||Family of Four*|
|Child Care||–||$1,629||Child Care||–||$1,656-$1,777|
|Health Care||$143||$573||Health Care||$143||$573|
|Monthly Total||$1,888||$5,899||Monthly Total||$1,867-$1,904||$5,787-$5,941|
|ANNUAL Total||$22,656||$70,788||ANNUAL Total||$22,404-$22-848||$69,444-$71,292|
|Hourly Wage||$11.33||$35.39||Hourly Wage||$11.20-$11.42||$34.72-$35.65|
*A Family of four is defined as two adults, one toddler and one infant
HOW CONNECTICUT UNITED WAYS ARE HELPING ALICE AND STRENGTHENING OUR COMMUNITIES
We all have a vested interest in improving conditions for ALICE. Just as effects of ALICE households’ everyday hardships ripple throughout our communities, so too will the effects of helping ALICE get ahead. Through our work on Education, Income, Health, and Basic Needs/2-1-1, Connecticut United Ways are helping ALICE—and everyone in the community—improve their lives.
Expanded opportunities for high-quality education will ensure academic and career success for children in ALICE households. United Ways invest in programs that improve school readiness, ensure early grade reading proficiency and middle grade success, support on-time high school graduation, and increase access to college and career training.
United Ways help ALICE increase earnings with career advancement opportunities through targeted sector-based training initiatives. United Ways also provide income support through volunteer income tax assistance (VITA), raising awareness of EITC and Child Tax Credits, coordinating volunteer budget coaching programs, and promoting asset-building strategies.
Good health is the foundation upon which better educational outcomes, improved job performance and long-term financial stability are built for ALICE and for all of us. United Ways promote access to health care and healthy living programs to reduce childhood obesity and increase knowledge of healthy food choices. United Ways support early screening programs for children to identify developmental and social/emotional concerns and strengthen follow-up referrals for services.
Connecticut United Ways coordinate efforts and investments that help ALICE and others in our communities meet their basic needs through mobile food pantries and other initiatives to increase food security and by committing to 10 year plans to end homelessness and to promote affordable housing. United Way 2-1-1 provides free, around-the-clock access point to information about critical health and human services programs for everyone in the state.
|ABOUT THE ALICE PROJECT
In 2014 Connecticut joined with five other states (California, Florida, Indiana, Michigan, and New Jersey) to release their first statewide ALICE Report. Upon the release of the 2016 ALICE Update Report, 15 states had joined the ALICE movement and were working towards releasing ALICE Reports in their respective states. The Connecticut ALICE Report’s are sponsored by the sixteen Connecticut United Ways.