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Connecticut income level down as poverty ranks grow

By Lee Howard

Publication: The Day

Published September 23. 2011 4:00AM   Updated September 23. 2011 6:28PM

The pay of Connecticut residents took a hit last year, led by a decline in median household income of about $4,000, according to census figures released Thursday.

The median household income in Connecticut last year fell to $64,032, compared with the previous year's figure of $68,174. The one-year decline in household income of 6.1 percent was significantly above the U.S. decline of 2.2 percent.

Connecticut was the second-worst performing state in the nation last year after Nevada.

"The numbers are reflecting the fact that it's not just been the unemployment side of the economy that's gotten clobbered," Peter Gioia, an economist and vice president of the Connecticut Business & Industry Association, said in a phone interview. "It's also hit income."

At the same time, according to an analysis of the data by the advocacy group Connecticut Voices for Children, poverty in Connecticut is on the rise, from 9.4 percent two years ago to 10.1 percent last year. Among children, the poverty level increased from 12.1 percent to 12.8 percent.

In New London County, 8.8 percent of the population had income below the federal poverty level last year, and 10.8 percent of the region's children were living in poverty, according to the latest figures. New census figures show 15.3 percent of Americans nationwide live in poverty.

"Connecticut's rising poverty, falling income and high unemployment reinforce the need for state policymakers to develop a statewide plan to create good-paying jobs and to restart our economic engine," Jamey Bell, executive director of Connecticut Voices for Children, said in a statement.

Steve Lanza, an economist at the University of Connecticut and executive editor of the quarterly publication The Connecticut Economy, said that while the decline of household income might be dramatic, figures for family income are more significant in comparing the state's economic decline because they are a more stable indicator.

Connecticut's median family income fell from $84,571 to $81,236, a reduction of 3.9 percent.

"The incomes that have seemed to have suffered the biggest declines have been the wealthier states," Lanza said in a phone interview.

Despite Connecticut's declining pay, the state's residents still have the fourth-highest median income in the country. Only Maryland, New Jersey and Alaska report a higher median income, according to the new U.S. Census Bureau figures.

"It's not the end of the world yet," Lanza said."But it does make you sit up and take notice a bit."

Lanza noted that real income of families and households - reflecting buying power relative to inflation - has been declining in Connecticut and the United States for decades. In Connecticut, he said, the decline has hit middle-aged men with less education the hardest, particularly in the manufacturing and construction industries.

Gioia noted that state residents still haven't recovered the level of income attained before the 2008 recession. This is partly due to wary businesses implementing job-sharing programs in which two part-timers are hired instead of one full-timer, and it partly reflects the cutback or elimination of overtime hours, he said.

Ways to turn the state's economy around, Gioia said, might include funding targeted job-training programs, boosting research-and-development tax credits and making infrastructure investments. The state could also review its regulatory-approval processes to make them more uniform and more streamlined.

"The state should consider a moratorium on new regulations affecting businesses until they get a thorough review," he added.

The new census figures show a wide disparity in income among the state's eight counties, with Tolland and Fairfield at the top of the list with median incomes in the $75,000 range and New Haven at the bottom with a median of about $57,000. New London County sits in the middle with a median income of $62,349.

The income disparities were reflected in Connecticut's poverty numbers. Hartford's rate was pegged at 31.2 percent and New Haven's at 29.7 percent, while Norwalk, at 7.3 percent, and Danbury, at 11.6 percent, were the least impoverished of the state's cities with populations above 65,000.

The poverty rates for Norwich, New London and Groton were not given because they didn't reach the population threshold.

Connecticut Voices for Children said the statewide poverty rate for Hispanics was 23.6 percent. For African Americans, the figure was 22.1 percent, while white poverty levels were placed at 5.9 percent.

"Connecticut had already experienced the largest increase in poverty of any state between 2007 and 2008," according to a release from the organization. "There was a significant increase in poverty among all Connecticut residents over the decade, rising from 7.3 percent in 2001 to 10.1 percent in 2010."

The group said the increase in poor families occurred despite legislative goals of cutting child poverty in half between 2004 and 2014. Connecticut Voices for Children, a think tank that advocates on behalf of the state's poor and middle class, was hopeful that the legislature's passage of an Earned Income Tax Credit this year would help lift some families out of poverty.

The group added that the new census shows a decrease in uninsured children statewide, due mostly to expansion of Connecticut's HUSKY health insurance program.

l.howard@theday.com

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