Economic Inequality
Even before the COVID-19 pandemic led to millions of unemployment claims and an economic recession, 40% of Connecticut households could not afford to meet their basic needs, such as housing, food, health care, child care, and transportation.
The 2018 United Way ALICE (Asset Limited Income Restrained Employed) report describes that while 10% of Connecticut households have incomes below the Federal Poverty Line (FPL), another 30% still don’t make enough money to afford all their basic expenses. This means that approximately 400,000 households in the state don’t meet the criteria for living in poverty, yet still have income below cost-of-living, as defined in the ALICE report.
Data shows that poverty rates for Black and Hispanic residents are higher than for white residents, and the racial disparities are even greater for children in Connecticut. There is also a stark racial wealth gap, stemming from unjust policies such as redlining which has prevented many Black families from being able to buy a house and build wealth. A 2019 report by the Institute for Policy Studies found that nationally, the median Black family holds only 2% of the wealth of the median white family. These realities are outrageous and immoral.
Indignation about poverty levels is compounded by the truth exposed in the high level of income inequality. According to a report from the Economic Policy Institute utilizing data from 2015, Connecticut has the third highest level of income inequality in the country, with the top 1% of earners making 37 times as much than those in the 99%. Poverty does not have to be inevitable; it is a product of our unjust policies that disregard the wellbeing of those struggling to survive.
When we accept a system in which the wealthy get to keep a larger share of their money and benefit from exclusive tax breaks, while the poor face stagnant wages and a disproportionate tax burden, we ignore the common good. In a state of great wealth and resources, we should not have nearly 3,000 people experiencing homelessness, or over 117,000 children facing food insecurity. These pre-pandemic numbers are likely to be even higher now due to the global health crisis and related economic crisis. It is a moral and political failing to have these stark inequalities, and even worse to do nothing to dismantle them. It is the failing of our policymakers when they choose to preserve our current regressive tax structure that demands that poor people pay a larger share of their income. But it is our failing when we resign ourselves to this structure as an immovable, untouchable system and do not attempt to change it.
Think of how our communities could be different if we took steps to meaningfully address the economic inequalities in our state. Theologian Walter Brueggemann wrote about the “prophetic imagination” which is a practice of visualizing how the world should be. Out of that imagining, we must take steps towards the realization of justice. One of the principles of Catholic Social Teaching is preferential option for the poor, meaning that we must pay particular attention to the needs and concerns of those who are financially poor or otherwise marginalized. We are called to look at the implications of policies and practices from the viewpoint of how they impact the poor and serve to keep people poor. We can then bring our voices to the conversation to enact just policies.
Policy Solutions
In Connecticut:
- Reforms to our state tax structure, so that the wealthy pay their fair share
- A couple of specific changes that experts and policy makers have considered include: raising taxes on the top 1% of millionaires; and a capital gains surcharge on the wealthiest taxpayers
- Increasing the Earned Income Tax Credit (EITC), which has been shown to improve the economic conditions for low-income individuals and families
State and Federal Level:
- Increase the minimum wage to bring it up to a real living wage. For a single parent with one child in Connecticut, the estimated living wage is $29.33/hour.
- Increase the top income tax rates. Mandating that the wealthy pay a larger percentage of their income will allow for greater investments in policies and programs that lift people out of poverty and prioritize the common good, such as access to affordable health care, nutrition assistance, education and child care.
- As we transition to a green economy, a green jobs program that would put people to work in good paying jobs with benefits should be initiated. Municipalities should commit to filling the jobs in their communities first with people from those communities. States and other stakeholders should establish training programs for the skills needed to be successful in these jobs.
- Create more affordable housing so that low-income people who are often rent-burdened can spend less of their income on housing costs. According to a February 2020 publication by the Partnership for Strong Communities, close to 120,000 Connecticut households spend over half their income on rent and utilities.
- Expand subsidies for childcare and invest in universal pre-k programs. Childcare costs remain an enormous burden for families. Childcare centers operate on tight financial margins, meaning that childcare workers often do not make more than minimum wage. Urge your Members of Congress to support the Universal Childcare and Early Learning Act. Analysis of the bill here, from Vox.
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