Asset Limited, Income Constrained, Employed: United Way Report Shows That ALICE Is Everyone's Neighbor
United Way of Connecticut released, on November 16, a 121-page, statewide report, documenting Connecticut households struggling to afford living expenses that exceed the official federal poverty level of $11,670 for an individual or $23,850 for a family of four. United Way calls this population ALICE, an acronym for Asset Limited, Income Constrained, Employed. In Newtown, one in five people meet these criteria and live with these daily economic challenges.
There have been many reports on the pressures on the middle class, said Richard Porth, president and CEO of United Way of Connecticut in a conference phone call on Wednesday, November 12. The ALICE report differs in the level of detail that will allow United Way to better understand what is going on, and look at both the costs and income sides of challenges, he said.
More importantly, Mr Porth said, it is hoped that the ALICE report will “open more eyes, put a face on people in these findings.” From co-workers to family to friends, “We all know ALICE,” Mr Porth said. “We hope the report will illuminate the situation,” he added.
According to the report, a family of four needs an annual income double that of the federal poverty threshold to cover household budget costs.
“The ALICE Report uses a new measure, called the ALICE Threshold, to identify the true size of the population of people in Connecticut who do important work in our community and yet struggle to get by.”
Even though Connecticut has one of the highest median hourly wages in the United States, 51 percent of Connecticut wage earners earn less than $20 an hour ($40,000 a year if full-time). Many of these workers have jobs that are needed in communities, such as childcare, health care, security, and retail positions.
From poor cities to rich suburbs, United Way has been on the ground, said Merle Berke-Schlessel, president and CEO of United Way of Coastal Fairfield County, in the November 12 conference call. “We have worked well and supported the extreme poor,” she said. In recent years, however, there has been a rush on food and housing assistance.
Affording The Basics
“Despite working, people can’t afford the basics of living,” she said. What is referred to in the report as a Household Survival Budget, suggesting the minimum amount of money it takes for individuals or families to live, is a very conservative estimate of monthly expenses, Ms Berke-Schlessel said. The report shows the Household Survival Budget for each city in Connecticut.
What is astonishing, Ms Berke-Schlessel went on to say, is that in a state with many wealthy suburbs, “ALICE lives in every city in Connecticut.”
Statewide, 35 percent of households live below the ALICE Threshold. In Newtown, considered by many to be an affluent community, 19 percent of households fall below the ALICE Threshold. One fifth of Newtown residents find it difficult to meet regular living expenses, and are often just one disaster away from dropping into poverty.
According to ALICE, “To afford all of the essentials in the Household Survival Budget in Newtown, a single adult would need a full time job earning $10.32 per hour [$20,680 annual income], and a family of four would need full time employment with a household hourly wage of $31.80 [$63,606 annual income].”
Financial insecurity affects people’s viability in communities, Ms Berke-Schlessel said. The report highlights how insufficient living funds impact communities through job absenteeism, uninsured motorists and unsafe vehicles on the road, higher health insurance premiums, less productivity, and situations that tax resources of homeless shelters, foster care, and emergency health care. Both short-term support and long-term systemic change is needed to impact the challenges of a high cost of living and a need for higher paying jobs in the state, she said.
Any Job Is Not The Answer
In response to a question concerning ways to reverse trends of industry changes that have resulted in losses of higher paying jobs, ALICE report author Stephanie Hoopes Halpin, PhD, assistant research professor, Rutgers School of Public Affairs and Administration, agreed that any job is not a solution.
“We need to ask what structural changes are needed in industries in Connecticut,” she said. “[The ALICE report] is the beginning of a dialogue,” Ms Halpin said.
The United Way policy agenda for this year will focus on ALICE, said Mr Porth, particularly the areas of child care and housing, which are the biggest drains on ALICE households.
“There is no sugar coating it. We are losing middle skill jobs and replacing them with service sector jobs that are low pay,” Mr Porth said.
In a later interview with The Newtown Bee, he stressed that Connecticut remains one of the states with the highest proportion of higher paying jobs. However, it will require years of focus by state and community leaders in the state to see changes through.
“I hope we can refocus efforts on protecting and growing those middle skill jobs,” he said, as well as providing opportunities for career advancement.
Kim Morgan, CEO of United Way of Western Connecticut, in an interview with The Newtown Bee, Thursday, November 13, said that there are challenges unique to the working poor who call Fairfield County home.
“It is the high cost of living and housing, and the high cost for preschool and daycare that are hard in this area,” Ms Morgan said. Additionally, jobs that pay even the minimum it costs to live in towns like Newtown are mainly located down county. “The big corporations are not [in towns like Newtown],” she said.
Traveling out of town increases the stresses ALICE households experience, she said, due to the cost of gas, wear and tear on a vehicle, and the stress of being in traffic and having less family time.
“We do know from [the ALICE report] where jobs are going to be growing: the sectors where people will not earn enough to support a family. Families will still need more than one job [just to meet the Household Survival Budget],” Ms Morgan said.
Accessing Resources
The other problem ALICE households located in “wealthy” communities have is that they do not know how to access resources that exist.
“They don’t know how to navigate the food pantry systems, for instance, or may not want the stigma of using a local food pantry. Having knowledge, such as the fact that it is necessary to sign up early in the heating season for fuel assistance, is important for those not used to asking for help. The working poor may also be holding multiple jobs, which means less time to take advantage of any resources in a community, Ms Morgan said.
The 211 program is one that needs more promotion, she said. Calling that number connects callers with trained operators, 24/7, who can answer questions about resources.
Resources are in place, but not everyone is aware of what they are and how to access them, Mr Porth agreed.
The 211 program received a total of 451,000 calls in 2013, he said, 1,128 calls of which were from Newtown residents. Housing and shelter, utilities, and outpatient mental health care were the top three concerns of callers in 2013.
“It’s a constant challenge for us at 211, to let people know that anyone in the state can call. We want people in every city and town to know they can call 211 or go to our website [211search.org],” said Mr Porth.
The effort to help the ALICE population is already underway. Connecticut United Ways are focused on four points that may help improve lives of the struggling working population, and all of Connecticut.
Education And Health Care
Education opportunities must be expanded. Improving school readiness and preparation throughout the school years, as well as increasing access to college training are among the initiatives supported by United Way. Targeted sector-based training initiatives can add to career advancements and opportunities, thus increasing earnings for ALICE households.
Promoting access to health care and healthy living programs are essential for school and job performance.
Finally, United Way provides 24/7 assistance by calling 211 for free, confidential information and referrals for food, housing, employment, health care, and counseling.
“There is a need for more resources for people not at the poverty level,” Ms Morgan said. The United Way already provides subsidies to cover rent deposits. While a working household may make enough to meet monthly rent, coming up with the deposits required for a better living space is not always possible.
The United Way Financial Resource Center provides budget coaching, she said, and for ALICE households, a budget is essential. Job training and financial stability for families are essential, said Ms Morgan.
One area she would like to see United Way expand upon is that of preschool and daycare. Not only do the costs (between $10,000 and $15,000 per year) cripple ALICE families trying to get ahead, but children need preschool education before entering the public school system, she said.
Ms Morgan sees the release of the ALICE report as a starting point.
“These are people playing by the rules, working hard, and can’t get by. And,” she added, “we need them.”