ASSET LIMITED, INCOME CONSTRAINED, EMPLOYED
HAVE YOU MET ALICE?
ALICE, an acronym for Asset Limited, Income Constrained, Employed, is a new way of defining and understanding the struggles of households that earn above the Federal Poverty Level, but not enough to afford a basic household budget. ALICE could be your child care worker, your parent on Social Security, the cashier at your supermarket, the gas attendant, the salesperson at your big box store, your waitress, a home health aide, or an office clerk.
For far too many families, the cost of living outpaces what they earn. These households struggle to manage even their most basic needs – housing, food, transportation, and health care. When funds run short, cash-strapped households are forced to make impossible choices, such as deciding between quality child care or paying the rent, filling a prescription or fixing the car. These short-term decisions have long-term consequences not only for ALICE families, but for all of us.
This year we partnered with the United Ways of TN to conduct the “ALICE in Tennessee: A Financial Hardship Study”, which provided a detailed look at the challenges faced by this population. The people whose incomes are above the poverty line but below “survival” levels.
To define who is ALICE, the study compared the average incomes of Tennessee residents with “household survival budgets” base on the estimated cost of living. Authors of the study have said the “survival budget” is based on the most basic levels of expenses, such as home-based childcare rather than care at a state-certified childcare facility. It also does not include “stability budget” items, such as home internet services.
The “household survival budget” for a family living in Tennessee with two adults, one infant and one preschooler includes $692 for housing, $543 for food, $898 for childcare, $644 for transportation, $539 for healthcare, $75 for technology and $385 miscellaneous. With taxes, a family must make $4,233 a month or $50,796 a year to follow this budget.
The prevailing idea behind the results of the study is the cost of living throughout Tennessee have grown faster than the average wages employers are paying.
The staff at United Way of Bristol are used to helping people in poverty but this study truly brought home the fact that there are more people in our area that are living close to the poverty line and are at risk of falling into poverty. Even if someone is making well over the federal minimum wage, they may still be struggling to make ends meet. Many elderly people are impacted as well because so many of them are retired and living on very limited incomes.
United Way of Bristol hopes that as we gain a better understanding of the data in both the Tennessee and Virginia reports, that we will be able to help shift the criteria for many of our local assistance programs to not only help those living in poverty but our ALICE families as well. We also anticipate changes in the funding we provide in our community to not only focus on our greatest needs but to focus more on helping our ALICE families. Our families that are working really hard but continue to struggle just to survive.