Executive Intelligence Review


Millions of U.S. Families Trapped in Poverty, New Study Shows

May 18, 2018 (EIRNS)—A study released May 17 by the United Way ALICE Project paints a devastating picture of the poverty afflicting millions of U.S. families, many of whose members are employed, but don’t earn enough to cover the minimum amount needed to sustain a family.

The study by the United Way ALICE Project shows that nearly 51 million U.S. households don’t earn enough to afford a monthly budget to cover housing, food, childcare, healthcare, transportation and cell phone. This is 43% of all U.S. households, and includes 16.1 million families living in poverty, plus 34.7 million families who fall within the category of ALICE— Asset Limited, Income-Constrained, Employed. That is, they make less than what’s necessary to “survive in a modern economy.”

According to project director Stephanie Hoopes, despite “seemingly positive economic signs, the ALICE data show that financial hardship is still a pervasive problem” in the United States. California, New Mexico and Hawaii have the largest percentage of struggling families, at 49% each; North Dakota has the lowest. The study points out that these “employed” in the ALICE category are low-wage earners such as childcare workers, home health aides, office assistants and store clerks, who have no savings. The study also states that 66% of U.S. jobs pay less than $20/hour. Looking at counties, the study gives one example of King County in Seattle, in which an average family of four in 2016 needed a “survival” budget of $85,000, requiring an hourly wage of $42.46. Only 14% of the state’s jobs pay more than $40/hour.

According to the United Way ALICE website, an ALICE member is “

a hardworking member of the community who is employed, yet does not earn enough to afford the basic necessities of life. ALICE earns above the federal poverty level, but does not earn enough to afford a bare-bones household budget of housing, child care, food, transportation, and health care.”

Explaining that United Way ALICE uses a new methodology to provide a more accurate picture of financial insecurity at the state, county, and municipal level, John Franklin, president and CEO of United Way of Northern New Jersey, warns that

“for too long, the magnitude of financial instability in this country has been understated and obscured by misleading averages and outdated poverty calculations.... It is morally unacceptable and economically unsustainable for our country to have so many hardworking families living paycheck to paycheck. We are all paying a price when ALICE families can’t pay the bills.”