The ALICE® report, released this week by United Ways throughout the state of Maryland, reveals that more than a third of Maryland households—nearly 750,000—can’t afford the state’s high cost of living and don’t earn enough to afford basic necessities.
ALICE is an acronym for Asset Limited, Income Constrained, Employed. The earnings of Maryland ALICE individuals and families are not enough to support a “survival budget” that is more than twice the Federal Poverty Level (FPL). The report explains what it costs for those struggling to meet the most basic level in the local economy, and was commissioned to provide a framework, language and tools for policymakers and stakeholders to understand and address the economic challenges of Maryland’s growing ALICE population.
Who is ALICE?
- ALICE represents our hardworking neighbors in need. ALICE holds positions such as cashiers, administrative and nursing assistants, waiters/waitresses, laborers and security guards and jobs in the retail and food industries. Vital to our state’s future economic well-being, they face barriers beyond their control that limit their ability to become financially stable and self-sufficient.
- ALICE earns above the FPL, but struggles to afford the basic necessities. A four-person ALICE family in Maryland requires a Household Survival Budget of $61,224, far above the FPL of $23,850 (2014). First published in 1965, the FPL does not accurately reflect the current, local costs of living. The ALICE Household Survival Budget covers only the most basic, necessary 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.
In contrast, the ALICE Household Stability Budget—the amount needed to support and sustain a household over time—is $39,030 for an individual, and $121,656 for a family of four.
- The ALICE Survival Budgets do not leave any room for unexpected expenses. For ALICE, a major car repair, medical emergency or unexpected financial hardship often means they are forced to make difficult choices such as forgoing healthcare, healthy food or car insurance. These choices are costly not only to personal health and safety, but to the wider community in terms of increased taxes and insurance premiums and reduced workplace productivity.
The in-depth report on the state of our struggling neighbors indicates that 25 percent—534,801 households—in Maryland qualify as ALICE, up significantly from 18 percent in 2007, the start of the Great Recession. Adding ALICE households to those living below the poverty level (10 percent) more than triples the state’s vulnerable population to 35 percent.
The report also reveals that low wage jobs dominate the state economy. More than 53 percent of jobs pay less than $20 per hour, with most paying between $10 and $15 per hour (or $30,000 per year at $15 per hour). The basic cost of living in Maryland is more than most of the state’s jobs can support.
“In central Maryland alone, 36 percent of households are at or below the ALICE Threshold,” said Franklyn Baker, president and CEO of United Way of Central Maryland. “This report brings to light the many challenges ALICE faces, gives a face to our neighbors in need and underscores the need for the development and expansion of health and human services and the policies that support them.”
According to the report, households either living in poverty or qualifying at or below the ALICE threshold exist in every county in central Maryland: 45 percent in Baltimore City, 28 percent in Anne Arundel County, 40 percent in Baltimore County, 28 percent in Carroll County, 34 percent in Harford County, and 22 percent in Howard County.
“This report strongly supports United Way of Central Maryland’s vision to provide the building blocks for long-term self-sufficiency—housing, employment, health and education—for those in need throughout our region,” said Baker. “But we can’t do it alone. We need the help of our supporters and volunteers to help us put more Maryland families on the path to stability.”
Funding for the Maryland ALICE report was made possible by OneMain® Financial. “Many of our customers are ALICE—working hard to remain stable, and yet they are one major home repair or healthcare expense away from having a serious financial challenge,” said Trish Weaver, Director of Community Engagement at OneMain. “We are proud to work with the ALICE Project and our partnership fits perfectly with OneMain’s commitment to our customers and communities.”
For more information about the ALICE report and United Way of Central Maryland, visit www.uwcm.org/ALICE.