Report: 4 in 10 Households in Greater New Haven are Struggling to Afford Basic Needs

During the first two years of the pandemic, the number of Connecticut households unable to afford the basics grew to 39%, an 11% increase, and Greater New Haven has the highest percentage of families struggling to make ends meet at 42%, according to a new report from United Way of Greater New Haven 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 modern 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 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 Greater New Haven was $110,172 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.    

The new ALICE report also highlights the inequalities that were exacerbated by the pandemic. In Connecticut in 2021, Black and Hispanic households, young households, and single-parent households had the highest rates below the ALICE Threshold.  

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, officials point out. 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, yields a projected 18.2% rate of inflation in Connecticut from 2021 to today.  

“Our community can’t truly thrive if we are leaving 42% of households behind,” said Jennifer Heath, CEO of United Way of Greater New Haven. “A healthy community means that everyone has the resources to meet their basic needs.” 

As the costs of basics have climbed, wages for ALICE workers have failed to keep up. As a result, workers have lost buying power over the past 15 years, officials explain. 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 level, visit United4ALICE.org/ALICECrosscurrents.