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Connecticut’s income inequality: Hispanic households can’t afford basic needs

Hispanic – Latino households in Connecticut face disproportionately stagnating wages and a rising cost of living, according to a recent report from the United Way.

Asset Limited, Income-Constrained, and Employed (ALICE) analysis found that 63% of Hispanic – Latino and 57% of Black households fall into the ALICE category, while fewer than one-third of white households do so. 

The study also found that 38% of Connecticut’s nearly 1.4 million households could not afford basic needs in 2018, including 11% that lived below the federal poverty level.

Of Connecticut’s 1,378,091 households, 146,552 earned below the Federal Poverty Level (11%) in 2018, and another 367,175 (27%) were ALICE.

The ALICE report asserts that the federal poverty level establishes too minimal a standard, and attempts to quantify the income needed in Connecticut to purchase basic goods and services including housing, food, health and child care,  transportation, and technology, reported CTMirror. 

The cost of basic goods and services in Connecticut has risen faster than that of other expenses. Basic inflation between 2007 and 2018 was 1.8% while the cost of items on the ALICE survival budget rose 3.4%.

The report defines the minimum household survival budget in Connecticut as $28,908 annually for a single adult, $31,752 for a single senior, and $90,660 for a family of four that includes two young children. By comparison, the federal poverty level thresholds includes $12,140 for a single adult and $25,100 for a family of four.

The report urges policymakers to continue seeking ways to elevate the earnings of poor families.

ALICE households, which earned $14.3 billion in 2018, would need to make another $14.9 billion to clear that mark. Because poor families already save very little money, most of their earnings are spent, spurring additional economic activity.

The report projects that raising all households’ earnings above the ALICE level would then generate about $2.9 billion in additional, federal, state, and local tax revenue.

Report: Number of working poor on the rise in CT leading up to the pandemic was first published by CTMirror.

Publisher’s Note: CTLN and CTMirror collaborate to best serve the Connecticut Hispanic, Latino community.

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