For nearly two out of every three Latino households in the state, a harsh fact of life is that their income is insufficient to obtain the basic necessities let alone cover additional expenses, such as a dental care, according to a recently released Connecticut United Ways report.
But while the struggle to make ends meet is shared by many people regardless of their ethnicity, this problem is more prevalent for Hispanics, the state’s largest minority community, than for the overall population.
This disparity is among the major finding in the United Way’s 2018 ALICE (Assets Limited Income Constrained Employed) report, which spotlights the ongoing plight of the state’s working families and individuals whose earnings surpass the federal poverty level but cannot afford the basics of food housing, health care, transportation, technology and child care.
Approximately 110,000, or 65 percent of the state’s 169,000 Hispanic households in 2016, could not afford basic needs, calculated at about $77,000 a year for a four person household. Among the causes of their economic distress was the slow recovery from the recent recession and the influx of immigrants, many in the 18-24 age group, with limited earnings power.
Achieving enough income to sustain a survival budget was an issue for 40 percent of all 1.4 million Connecticut households: 32 percent of white households, 62 percent of black and 31 percent of Asians.
“These are hard working people, including those who are your teacher’s aides, home health aides and hold other jobs,” said Paula S. Gilberto, president and CEO of the United Way of Central and Northeastern Connecticut, one of fifteen regional United Way agencies which joined with the state’s United Way umbrella organization to fund the 2018 report, the third in a series of income disparity analyses produced since 2010.
Among the major consequences of insufficient income is a disparity in health care between the ALICE households and the the general population. Moreover, the biggest health-wealth divide is in dental care, the ALICE Report said. While low-income families may put off a trip to the dentist rather than skimp on already scarce necessities, the report states that “the wealthier get better care … and have better social and job opportunities.
While the statistics are bleak and the challenge is daunting, the United Ways also saw some positive signs emerging through the various job training and economic education programs already in place. These include collaborative efforts with entities such as Workforce Solutions. There also are social service initiatives involving member agencies such as the Hispanic Health Council and other organizations serving large Latino population.
“We have been extremely committed to developing economic mobility for many years,” Gilberto said, “and are excited by the progress.”
The ongoing efforts include advocacy of long-term public policy decisions and ongoing comprehensive programs. At the same time, there is a focus on collaborate efforts to improve incomes, child care and health services, said Richard J. Porth Jr., the president and CEO of United Way of Connecticut. “There are opportunities for other organizations to help address these needs.” he said.
The United Way leaders are particularly enthusiastic about the Volunteers Income Tax Assistance (VITA) program. Each year hundreds of volunteers are trained and certified to help people with their tax forms. Last year, 12,000 individuals received assistance in completing their federal and state returns. This effort brought back $28 million in refunds and credits, which United Way concludes helped many ALICE households and stimulated the local economy.
There is a great needs for Spanish-speaking volunteers for the tax service, according to Maura Cook, director of marketing and engagement for the United Way of Central and Northeastern Connecticut. The link for joining this program is https://unitedwayinc.org/VITAVolunteer.
Still, the growth of households falling below the basic ALICE threshold (BAT) was trending in different directions for minority population as opposed to those classified as white. Since 2010, the United Way study found the Hispanic ALICE sector was up 34 percent overall and in every age group, but most severely among those over 65. The sub-BAT population increased 24 percent for blacks and 43 percent for Asians.
Meanwhile, among white households there was no change in the portion falling below BAT, with improvement in every age group except 45-64. This sector was up 11 percent as compared to 37 percent for Hispanics.
Looking at the income problem regionally, Gilberto said that in her agency’s three counties, Hartford, Windham and Tolland, the population is 78 percent white but this population comprises just 39 percent of the people the United Way serves.
The United Way research team, assembled from government, academic and non-profit organizations, calculated an average household budget to set a basic ALICE threshold (BAT). This total is $77,832 for a household consisting of two adults, a preschooler and an infant, and $24,672 for a single adult. Furthermore, a quarter of the ALICE households also are below the federal poverty level, $24,300 for a family of four and $11,880 for a single adult.
Child care was a major driver in basic household expenses, amounting to about $1,700 a month in the latest report. In addition, the United Way researchers added a smartphone for every adult among the basic necessities. This cost, covered under a $75 monthly technology outlay, was based on a low-end product.
On the input side, the researchers calculated the hourly wage required to reach this subsistence level is $38.92 for the former and $12.34 for the latter, according to data obtained from Census reports and other public sources. However, the reality is that 45 percent of jobs in Connecticut pay less than $20 an hour and this sector is where where much of current employment growth is centered, although prospects in manufacturing are improving for those having related skills.
The current plight of many Hispanic households and the overall population is driven by general demographic and economic trends, such as slow recovery from the recent recession, changes in the composition of households due to aging of the Baby Boomers and the emerging of a large population of Millenials whose approach to work and social issues is seen different than for preceding generations. In addition, the employment picture also has evolved, including a growth in “gig” and on-demand employment.
Immigration is another factor in BAT growth. According to the 2018 ALICE study, Connecticut’s foreign born population has increased in six years from 11 percent of the total to 14 percent with the largest age group 18-24. Latinos comprised 43 percent of the immigrants, the report states, with Asians at 25 percent and Europeans at 24 percent. Without this influx of newcomers, the state’s population trend would be negative, especially among younger adults, however many also are beset with language and education issues.
There are other significant issues that especially relate to the Hispanic predicament. Porth said these include that Hispanic families on average are younger than the overall population and that, as a group, they suffered more from the latest economic downtown. “They also have experienced a harder time recovering,” the United Way executive said.
United Way executives also said where people live and the proximity to opportunities for better paying jobs impact their ability to earn a living wage. The highest percentage of households not achieving the ALICE thresholds are in the state’s major cities where there are larger populations of Hispanics, blacks and mixed-race low-income families.
Bridgeport and Hartford both have more than 70 percent of their households below BAT. New Britain, New Haven and Waterbury fare only a few points better. However, Norwalk and Stamford, at 39 and 40 percent respectively, are right at the state average.
Although the state’s largest cities, where most Hispanics reside, had the highest ALICE rates, this is not exclusively an urban problem. At least 10 percent of households in every city and town share this economic predicament, according to the United Way report.
To underscore what can be done to help struggling households, the United Ways are also collecting stories about people who have overcome various barriers to succeed, thanks to United Way programs and welcome contributions from Hispanics and others.
One of these profiles relates to Johannie, a Latina divorced mother who struggled to make ends meet, lost her home and was overwhelmed with medical costs due to multiple sclerosis.
Johannie participated in United Way’s Volunteer Budget Coaching program, where she learned to develop a budget, track her expenses and create short- and long-term financial goals. Over time, she went from living in a friend’s basement, to renting an apartment, to now owning a home, the profile relates.
“I learned a lot about discipline and worked really hard to use all of the tools the program gave to me to help me organize and prioritize my finances,” says Johannie. “I was shocked at how quickly I was able to achieve my goals. And I don’t want to stop there. I have a lot more that I want to do!”
The 2018 ALICE Report is available at alice.ctunitedway.org.