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September 10, 2018 Editor's Take

ALICE households an important focus

Greg Bordonaro Editor
By Greg Bordonaro

The United Ways of Connecticut recently released their third annual ALICE report, which revealed 40 percent of households in our state have incomes that fall below what is needed to pay for basic necessities.

The number is startling in many respects but also not totally surprising. Most people understand that Connecticut is an expensive state. In fact, the United Ways report concluded that a household of four, including one infant and a toddler, must earn nearly $78,000 a year to afford basic necessities, including housing, food, child and health care, technology and transportation.

That's a large number in a state where the median household income is $73,433.

The United Ways should be commended for putting a spotlight on the growing financial challenges of Connecticut families. But a more pressing question in my mind is what does the report hope to achieve? There are many studies that highlight the growing income inequality in this country but few propose realistic solutions to the problem. And new government programs and spending can't be the only answers, particularly amid Connecticut's fiscal challenges.

Richard Porth, CEO of United Way of Connecticut, and Paula S. Gilberto, president and CEO of the United Way of Central and Northeastern Connecticut, insist the ALICE report isn't simply a dry academic study. First and foremost, they want to raise awareness of the issue so that lawmakers, nonprofits and business leaders keep ALICE households (which stands for asset limited, income constrained, employed) in the their minds when crafting public or workforce policies.

It's also no coincidence that the timing of the report dovetails with United Way's annual fundraising campaign that kicked off Aug. 8. The United Way of Central and Northeastern Connecticut's goal this year is to raise $20 million, and it has established an ALICE fund so that contributors' money can go directly to programs that help financially strapped families with things like affordable food and child care.

But to be clear, the ALICE report isn't simply about boosting donations. Porth and Gilberto see it as a call to action and they want policymakers and business, civic and nonprofit leaders to help come up with answers.

United Ways are nonpartisan but they are active at the state Capitol. They release a state policy agenda each year aimed at helping their client base, but they must tread carefully on issues that bump up against the private sector, which they depend on for financial support. For example, one issue they've taken interest in is how to get low-wage workers more advanced notice on scheduling changes, which could help households with two working parents who share one car or require child care support.

A bill earlier this year in the state legislature that required employers to provide employees with at least 24 hours' notice of their work shifts was opposed by the business community and ended up dying in committee.

“We have to really think carefully with how we frame issues,” Porth said.

United Ways also back policies that aim to make child care and housing more affordable, and programs that support workforce development and financial literacy.

Gilberto and Porth wonder if employers can get more engaged in some of these issues, like providing workers with basic budgeting skills or offering emergency loans during times of financial crisis. This is a conversation employers should be engaged in, not just because it is the right thing to do from a social standpoint, but because there is a competitiveness factor at play.

Turnover is a problem for many employers, and companies of all sizes increasingly use employee benefits as a recruitment and retention tool. If employers better understand the needs of their workers they could offer more relevant benefits that will engender greater employee loyalty.

The one caveat we must all understand, especially policymakers, is that a one-size-fits-all model is rarely effective. We must be careful not to threaten jobs in an attempt to create more financial security for workers.

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