Watch the Columbus Metropolitan Club ALICE Panel from Oct. 4:
THE UNITED WAY ALICE PROJECT
The United Way ALICE Project provides a framework, language, and tools to measure and understand the struggles of the growing number of households in our communities that do not earn enough to afford basic necessities, a population called ALICE. This research initiative presents data that can stimulate meaningful discussion, attract new partners, and ultimately inform strategies that effect positive change.
Based on the overwhelming success of this research in identifying and articulating the needs of this vulnerable population, the United Way ALICE Project has grown from a pilot in Morris County, New Jersey in 2009, to the entire state of New Jersey in 2012, and now to the national level with 15 states participating.
Ohio United Ways are proud to join the some 450 United Ways nationwide to better understand the struggles of ALICE. Organizations across the U.S. also using this data to better understand the needs of their employees, customers, and communities. The result is that ALICE is rapidly becoming part of the common vernacular, appearing in the media and in public forums discussing financial hardship in communities across the country.
Together, United Ways, government agencies, nonprofits, and corporations have the opportunity to evaluate current initiatives and discover innovative approaches that give ALICE a voice, and create changes that improve life for ALICE and the wider community.
WHO IS ALICE?
With the cost of living higher than what most people earn, ALICE families – an acronym for Asset Limited, Income Constrained, Employed – have income above the Federal Poverty Level (FPL), but not high enough to afford a basic household budget that includes housing, child care, food, transportation, and health care. ALICE households live in every county in Ohio – urban, suburban, and rural – and they include women and men, young and old, of all races and ethnicities.
WHO IS STRUGGLING?
While the Federal Poverty Level reports that 14 percent of Ohio households faced financial hardship in 2015, an additional 26 percent (1.2 million households) qualified as ALICE.
WHY ARE THERE SO MANY ALICE HOUSEHOLDS IN OHIO?
Low wage jobs dominate the local economy: Sixty-seven percent of all jobs in Ohio pay less than $20 per hour, with three-quarters of those paying between $10 and $15 per hour ($15 per hour full time = $30,000 per year). These jobs – especially service jobs that pay wages below $20 per hour and require a high school education or less – will grow far faster than higher-wage jobs over the next decade.
The basic cost of living outpaces wages: The cost of basic household expenses in Ohio is more than most of the state’s jobs can support. The average annual Household Survival Budget for an Ohio family of four (two adults with one infant and one preschooler) is $60,396 – significantly more than double the U.S. family poverty level of $24,250.
Economic conditions worsened for ALICE households from 2007 to 2015: According to the Economic Viability Dashboard, it is difficult for ALICE households in Ohio to find affordable housing, job opportunities, and community resources in the same county. In fact, out of 88 counties in Ohio, only five scored in the highest third on all three indices of the Dashboard.
Public and private assistance helps, but does not provide financial stability: The income of ALICE and poverty-level households in Ohio is supplemented with $9.1 billion in government and nonprofit assistance, as well as $35.2 billion in health care resources. Because government expenditure is increasingly composed of health care spending, which consists of services and cannot be transferred to meet other needs, there remain gaps in Ohio to meet the most basic financial need in many areas, including a 40 percent gap for housing and a 50 percent gap for child care.
WHAT ARE THE CONSEQUENCES, AND WHAT WOULD IMPROVE THE ECONOMIC SITUATION FOR ALICE HOUSEHOLDS?
Consequences: When ALICE households cannot make ends meet, they are forced to make difficult choices such as forgoing health care, accredited child care, healthy food, or car insurance. These “savings” threaten their health, safety, and future – and they reduce productivity and raise insurance premiums and taxes for everyone. The costs are high for both ALICE families and the wider community.
Long-term change: While short-term strategies can make conditions less severe, only structural economic changes will significantly improve the prospects for ALICE and enable hardworking households to support themselves. Strengthening the Ohio economy and meeting ALICE’s challenges are linked: Improvement for one would directly bene t the other. The ALICE tools can help policymakers, community leaders, and business leaders to better understand the number and variety of households facing financial hardship and to create more effective and lasting change.
The United Way ALICE Report provides the following measures for each county in Ohio:
- Household Survival Budget calculates the actual costs of basic necessities. These include housing, child care, food, transportation and health care.
- ALICE Threshold is the average level of income that a household needs in order to afford the basics, as defined by the Household Survival Budget for each county.
- The Household Stability Budget demonstrates a budget greater than the Household Survival Budget and includes modest savings and other categories.
- ALICE Income Assessment is the calculation of all sources of income, resources and assistance for ALICE and poverty-level households in Ohio. This assessment reveals a shortfall and a gap between what these households bring in and what is needed for them to reach the ALICE Threshold.
- Economic Viability Dashboard uses three indexes to evaluate the economic conditions that matter most to ALICE households — housing affordability, job opportunity and community support — in each county.