[Connecticut] Report: Poverty up, wages down

from The Journal Inquirer

Household earnings declined for all but the highest of the highest wage earners in the state

Most Connecticut workers' wages aren't keeping pace with inflation, despite the so-called economic recovery, according to a new report issued this week by a New Haven public policy research group.

Connecticut Voices for Children also reported that over the past four years the state has seen increasing numbers of families living in poverty and without health insurance.

"The rising tide of Connecticut's economic recovery is not lifting the boats of most workers in the state," according to a statement from Connecticut Voices, which prepared its latest reports in partnership with the Economic Policy Institute, a liberal policy group based in Washington, D.C.

"These recent trends suggest that the vast majority of Connecticut's workers are not benefiting from its recent economic recovery."

Wages adjusted for inflation declined between 2003 and 2005 for all but the highest-wage workers - those who earn more than what 90 percent of the population do.

According to the report, the 90th percentile mark means individuals who earned at least $39.90 per hour in 2003. Based on a 40-hour work week, that represents an annual income of just under $83,000.

After adjustments for inflation, wages for the lowest 10 percent of earners fell from $8.41 per hour in 2003 to $8.21.

Similar declines included:

* The 20th percentile fell from $10.49 to $10.10.

* The 50th percentile fell from $18.08 to $17.25.

* The 80th percentile fell from $30.90 to $29.86.

Part of this trend stems from the types of jobs Connecticut has gained in recent years, the report states.

The state lost roughly 60,400 jobs in 31 months between July 2000 and September 2003 as the economy fell into recession.

By July 2006, Connecticut had regained about 54 percent of those jobs, or about 32,500.

But over the same period, job losses have been highest in the areas of manufacturing, information, and professional and business services. The one area of significant job growth, about 7.1 percent, has been leisure and hospitality, which traditionally has paid less than these other areas.

The average yearly pay in the five employment sectors showing the largest employment losses in 2005 was nearly $63,800, the report states, compared with an average wage of nearly $35,900 for the five sectors showing the most gains.

Connecticut Voices issued a second report recently showing that, given the shrinking value of wages, 9.3 percent of Connecticut residents, about 326,000, lived below the federal poverty level in 2005, compared with 7.5 percent in 2001.

For a family of four, that means a household income below $19,961 per year.

The report also found 12.4 percent of children in 2005, about 103,000, lived in households less than the poverty level. That's up from 9.3 percent in 2001.

Poverty rates were highest in New Haven and Hartford counties at 11.2 percent and 9.4 percent, respectively. It was lowest in Litchfield County at 4 percent. In Windham and Tolland counties, the rates were 8.5 and 5.5 percent, respectively.

"In the nation's wealthiest state, parents who are working full time should have sufficient income to afford decent housing, good education, quality child care, and health care for their children," said Shelley Geballe, president of Connecticut Voices. "Yet the thousands of Connecticut parents who work at jobs that pay poverty-level wages or that don't offer health insurance benefits find that, no matter how hard they work, there's never enough income to make ends meet."

Based on an analysis of federal census data, Connecticut Voices found that 11.3 percent of state residents, about 394,000, were without health insurance for all 12 months of 2005. That figure includes about 68,000 children, or 8.2 percent of the child population.

The two reports from Connecticut Voices also recommend:
* Increasing state investments in school readiness programs and scholarships based upon financial need.

* Protecting federal funding for child care, energy assistance, and educational programs, particularly for children in kindergarten through Grade 12.

The nonprofit group also is expected in the 2007 General Assembly session, which starts Jan. 3, to renew its call for a state-earned income-tax credit, which has drawn mixed reviews in the past.

Patterned after the federal EITC, this is a refundable credit that allows working poor families to gain a state income-tax refund equal to a percentage of what they made, even if they earned too little to owe any taxes.

Critics have said this isn't really a tax refund, but a subsidy program, and that the state would be better off investing those funds in social service programs.