About Family Economic Security Issues
The health, safety, education, and well-being of children are largely dependent on their family’s ability to make ends meet. “Economic security” means having enough income to meet basic needs and enough reserves to be protected against unexpected financial crises. For decades, Connecticut’s lower-income families have faced stagnating or declining wages, rising costs, and growing economic instability and uncertainty. While Connecticut’s economy grew and productivity increased in the recovery period between the 2001 recession and the Great Recession (2008 to 2010), wages for the bottom 50 percent of wage-earners either stagnated or declined. The result is that Connecticut workers in the lower half of the income spectrum entered the most severe recession since the Great Depression in worse economic shape than they were going into the milder 2001 recession. As a result of the Great Recession, income inequality in Connecticut has worsened.
In both good and bad times, Connecticut’s working families have seen their economic opportunities diminish. Even when the economy was growing, wages stagnated or declined for the state’s low- and middle-income workers and an increasing proportion of Connecticut workers earned less than the wage necessary to keep a family of four out of poverty.
Connecticut’s relative wealth is tempered by high costs of living. Income in Connecticut does not go as far toward meeting basic needs as in other states. Recent data show that Connecticut had the third highest cost of living of any state in the contiguous U.S., with the highest prices in the country for groceries and the second highest for utilities. When adjusted for the high cost of living, Connecticut’s lowest (10th percentile) are the sixth lowest in the contiguous U.S.
Typical measures of Connecticut’s wealth hide huge and growing income and asset disparities. According to the Census Bureau, Connecticut has the fourth highest median income in the country, while at the same time income inequality is second to only New York. Additionally, the gaps in real income between wealthy and poor families, and also between wealthy and middle-income families, have grown more in Connecticut than in any other state over the past two decades. Disparities are also dramatic along racial and ethnic lines: Connecticut’s racial disparities in household assets are among the greatest in the nation; the median white-headed household in Connecticut is more than 65 times wealthier than the median minority-headed household.
- For many Connecticut families, the building blocks of economic security are crumbling as family income stagnates.
- Connecticut is the only state in which the real (inflation-adjusted) income of the poorest 20% of families declined since the 1980s (by 17%, compared to a national increase of 11%).
- The 5.1% real increase in the incomes of Connecticut’s middle-income families since the late 1980s was the smallest percentage increase in any state.
- Connecticut’s very-low (10th percentile) and low (20th percentile) wages were less in 2011 than in 2001 (adjusted for inflation). Wages declined by roughly 7 percent for Connecticut’s lowest paid workers between 2001 and 2011 (adjusted for inflation) compared to a 4 percent decline nationwide. During this same ten year period, wages for the state’s highest paid workers (90th percentile) increased by 11.6 percent (adjusted for inflation).
- One in five households in Connecticut is “asset poor.” This means the household’s financial assets (savings, property, retirement, etc.) are so low that the family cannot survive for three months if family income is interrupted, even if the household’s expenses are reduced to the federal poverty level.
Key publications & legislative testimony
- Strengthening Economic Security for Connecticut Families
- Connecticut's Changing Demographics Foreshadow Declining Workforce Income
- The State of Working Connecticut 2012: Employment, Jobs and Wages in the Wake of the Great Recession
- Pulling Apart: Connecticut Income Inequality 1977 to Present
- Census Data Resources (poverty, income & uninsured data)
- Raising and Indexing Connecticut's Minimum Wage: Making Work Pay for All, for Good
- To Steer Course out of Downturn, Connecticut Needs More Hands on Deck
- Are CT Business Tax Credits Creating Jobs? Would We Know if They Weren't?
- Income Gaps are Harming Connecticut's Children
- Our legislative testimony on economic security issues
- Our legislative agenda
See all of our family economic security publications
- Brookings Economic Studies
- Center for Economic and Policy Research
- CFED and the Assets and Opportunity Network
- Center for Law and Social Policy
- Economic Policy Institute and the Economic Analysis and Research Network
- National Bureau of Economic Research
- National Employment Law Program
- New England Consortium
- New England Public Policy Center at the Boston Federal Reserve
- Partnership for Strong Communities
- Pew Center on the States economy reports
- Pew Research Center economics publications
- Political Economy Research Institute