Imagine having to make tough financial choices every day. Choices like, do I buy medicine or groceries with the money I have left? Do I fix my car so I can get to work, or pay my rent to keep from losing my home? Do I place my child in a quality daycare program, or do I look for a less expensive alternative that might not be the best care?
Odds are, you know someone who is faced with choices like these. Perhaps you once had to make these decisions—or even find yourself facing them now.
On January 9, United Ways throughout the state of Maryland released a report that gives an identity and voice to people who work hard, yet struggle to make ends meet. These people are called ALICE.
ALICE is an acronym for Asset Limited, Income Constrained, Employed. ALICE is the person who waits on tables, fixes cars, scans our groceries and cares for our elderly and young. Cashiers, administrative assistants, laborers, security guards—they’re ALICE. ALICE represents a growing number of individuals and families who are working—but who live paycheck to paycheck, most often with nothing left over for an unexpected event, such as an illness, car repair or job loss.
The report reveals that in central Maryland, a staggering 36 percent of households live at or below the ALICE threshold. Their earnings are not enough to support a Survival Budget that is more than twice the Federal Poverty Level (FPL), which does not accurately reflect current, local costs of living.
For example, a family of two adults and two children requires an ALICE Survival Budget of $61,224, far above the FPL of $23,850. This Survival Budget covers only the most basic and necessary of expenses: food, housing, healthcare, transportation, childcare and taxes. For a single adult, the FPL is $11,670; for a single ALICE adult, an annual budget of $23,568 is required to meet basic needs. For ALICE, one emergency can spiral into a crisis.
In contrast, the ALICE Stability Budget—the amount needed to support and sustain a household over time and includes savings, a mobile phone and modest miscellaneous expenses—is $39,030 for an individual and $121,656 for a family of four. (All data 2014.)
The report also reveals that low wage jobs dominate the state economy, with most paying between $10 and $15 per hour (or $30,000 per year at $15 per hour). The basic cost of living in central Maryland is more than most of its jobs can support.
We recently talked to Heather, a working mom with three children who’s finding it harder and harder to make ends meet for her family. Heather makes $16.50 an hour as a front desk manager in a Baltimore County dental practice. A new baby boy means that her family’s already tight budget must stretch even further. Daycare for her son and daughter is more than $1,500 month, and the rent on their 700-square-foot apartment was just raised.
Heather recently returned to work after six weeks of unpaid maternity leave. “I started saving up when I learned I was pregnant so I could take some time off after the baby came, but the money ran out—and I can’t afford not to work. And lately it seems like groceries and other things have just gotten more expensive.”
Heather left her previous job when a raise was not forthcoming. “I worked there for five years and was never late; never took a sick day.” Like her old job, her new job doesn’t offer any benefits other than free cleanings and minor dental work for her and her family. It does pay fifty cents more an hour and helps with the household income, but, she says, “We make too much to get help, but not enough to survive.” She and her boyfriend drive for Uber when not working their full-time jobs to help bring in some much-needed extra money.
“I’m not the kind of person who doesn’t pay my bills—I stay on top of them. But it’s not hard to get behind with the daycare and healthcare bills.”
United Way commissioned the ALICE report to fully understand and best respond to the needs of ALICE’s like Heather. The findings will be used to strengthen existing programs and to create new, sustainable initiatives, that will, in collaboration with United Way partner agencies and others, improve the lives of all ALICE individuals and families in Maryland.
United Way of Central Maryland has long addressed the needs of ALICE through its Family Stability programming. There are currently 12 sites offering families wraparound services to help them get back on their feet. These Family Stability sites are strategically located in neighborhoods with high rates of evictions, and calls into United Way’s 2-1-1 helpline, which connects callers—many of them ALICE—with important health and human services resources.
“This report strongly supports United Way of Central Maryland’s vision to provide the building blocks for long-term self-sufficiency: education, housing employment and health,” said president and CEO Franklyn Baker. “We will use it to bring to light the many challenges ALICE faces, and use it to give a face to our neighbors in need. We must address ALICE for the economic well-being of all of our residents.”
In the coming months, we’ll be publishing more stories about the report and about ALICE families and individuals. Be sure to check the ALICE website for the latest, and to access the full report as well as a summary.