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COVID-19 Hit as Record Number of ALICE Families Were Priced Out of Survival

July 30th, 2020 by WCBC Radio

Before the COVID-19 pandemic, 39 percent of Maryland’s more than two million households were already one emergency away from financial ruin – a 10-year record high – setting the stage for the unprecedented economic impact of the crisis, according to the state’s latest ALICE (Asset Limited, Income Constrained, Employed) in Maryland: A Financial Hardship Study, released today by United Ways of Maryland and sponsored by Kaiser Permanente. While nine percent of these households live below the Federal Poverty Level (FPL), another 30 percent are ALICE households – earning more than the FPL, but not enough to afford basic household necessities like food, housing, transportation, health care, and childcare.

 

“Our community has not been free from challenges of unemployment and poverty, which will be reflected in the new report, but as the COVID-19 pandemic continues to add a new layer of hardship, it is exposing an additional fragile population that will not be reflected,” said Juli McCoy, executive director of County United Way. “Calls to 211 and United Way for basic needs grew rapidly on the heels of layoffs and closures, with a large majority of those requests from households who previously have not had experience with an inability to meet their needs. County United Way will continue to provide funding to programs that ensure the most vulnerable can stabilize and rebuild their lives.”

 

Unlike today’s economy, from 2010 to 2018, Maryland showed steady economic improvements according to traditional measures. Unemployment in the state and across the U.S. fell to historic lows, gross domestic product (GDP) grew, and wages rose slightly. However, the cost of living rose, and worker vulnerability increased while wages in ALICE jobs were stagnate. As a result, the number of ALICE households increased by 57 percent in Maryland from 2007 to 2018. Of those, more than half are Black households. The data shows that while hardship is pervasive, the history of slavery and its ongoing legacy of systemic and institutional racism stigmatizes Black households uniquely. In every state, including Maryland, United For ALICE research documents the persistent and widening disparities in income and wealth between Black households and households of other races and ethnicities.

 

The ALICE in Maryland: A Financial Hardship Study shows that in 2018, the cost of survival ranged annually from $33,636 for a single adult, to $36,804 for a senior citizen and $87,156 for a family of four with an infant and a preschooler. Putting this in perspective, the median hourly wage for cashiers, the most common occupation in Maryland, was $10.67, or $21,340 per year, if someone is working full-time, year-round. Though minimum wage in Maryland has been raised to $11 in 2020, that is still an income of $22,000 for a full-time, year-round worker – less than any of the budgets. McCoy adds that “the local report highlights much different numbers for Allegany and Garrett Counties as a wide cost of living difference exists from the Maryland average, but those income minimums are still not being met to give families an equitable chance of financial stability.”

 

This mismatch between wages and costs is revealed by a new measurement debuting in this report, called the ALICE Essentials Index. This Index chronicles how the cost of housing, food, transportation, health care, childcare, and a smartphone plan rose at nearly twice the rate of inflation, as measured by the Consumer Price Index. The result is that in 2018, two parents working full time each needed to earn $21.79 an hour in order to afford the Household Survival Budget for a family of four. That’s up from a wage of less than $14.12 an hour affording that budget in 2007. During the same period, the number of low-wage jobs grew by 61 percent, accounting for the largest number of jobs in Maryland in 2018. The actual cost of household basics in every county in Maryland is far above the FPL for all household sizes and types studied.

 

“The ALICE Essentials Index shows that, through no fault of their own, ALICE families have been priced out of economic stability, setting the stage for the scope of this crisis,” said United For ALICE National Director Stephanie Hoopes, Ph.D. “Using the Consumer Price Index alone to measure inflation provides an incomplete picture of the cost of living, severely underestimating the mounting financial pressures on ALICE families.”

 

The ALICE Report has also helped to inform further research into the benefits cliff—a term used to describe the loss of public benefits resulting from small increases in earned income. In partnership with the University of Baltimore Schaefer Center for Public Policy and Kaiser Permanente, Maryland United Ways have also released The Impact of the Benefits Cliff study, which found that 9.4 percent of the Maryland population lives on incomes below 100 percent of the FPL, and another 12.3 percent have incomes below 125 percent of the FPL. Public assistance programs are based on the FPL, but the FPL is not enough for a household to cover even its most minimal costs. That means that assistance programs serve far fewer households than actually need assistance, even in a strong economy, and that a small increase in wages of only $100 per year for example, can lead to hundreds of dollars in lost benefits per month and severe financial hardship.

“The ALICE Report provides crucial data and insights that will inform community leaders and lawmakers as they develop strategies and policies that support these working families, many of whom are essential workers who put themselves at risk every day during the current pandemic,” said Celeste A. James, executive director, Community Health, Kaiser Permanente, which sponsored the ALICE Report and Benefits Cliff Study. “At Kaiser Permanente, we recognize that when you struggle to afford healthy food, a secure place to live, or access to transportation or health care, you can’t achieve total health. We must address inequities in our society that prevent individuals and families from achieving economic opportunities, financial stability and optimal health and wellbeing.”

McCoy is urging that the report’s findings should be put in play immediately to identify state and local support that addresses the unique challenges the COVID-19 pandemic has inflicted on ALICE families as businesses and schools remain closed indefinitely.

 

The report calls for stakeholders across all sectors to use its findings to remove obstacles to financial stability, identify gaps in community resources, and build data-driven solutions to help ALICE families achieve economic stability, bolstering the Mountain Maryland economy overall.

 

The ALICE Report for Maryland was sponsored by Kaiser Permanente and is a project of United For ALICE, a grassroots movement of nearly 650 United Ways in 21 states, corporations, and foundations, all using the same methodology to document financial need. ALICE Reports provide county-by-county and town-level data, and analysis of how many households are struggling, including the obstacles ALICE households face on the road to financial independence.

For more information or to find data about ALICE in local communities, visit UnitedForALICE.org/Maryland.

 

5 Responses to “COVID-19 Hit as Record Number of ALICE Families Were Priced Out of Survival”

  1. July 30, 2020 at 1:52 pm, mac said:

    Get ready for the knee jerk, rabid comments by the MAGA Trump bunch. If poor people want more they can get out and work for it. No handouts to that lazy bunch. No socialism from the Liberal Democrats.
    On the other hand take a few minutes and read an article from Forbes Magazine.

    https://www.forbes.com/sites/stevedenning/2019/12/05/understanding-the-us-economy-lots-of-rotten-jobs/#1e3966de2d97

    Reply

  2. July 30, 2020 at 3:11 pm, Ron said:

    Absolutely, the jobs that are left in this country for the most part don’t pay the bills. People have to work two sonetimes three of them to make ends meet.politicians on both sides are to blame with their lopsided trade deals. Turns out ole Ross Perot was right.

    Reply

  3. July 30, 2020 at 4:23 pm, Susan said:

    How many unemployed people in Allegany County can pass a drug test?

    Reply

    • July 30, 2020 at 7:25 pm, LRH said:

      > You are not suppose to ask that question in 2020. No one wants good people to suffer how, yes there should be help provided by the government. However, those that continue to do nothing to help improve their own situation need a push. And yes, as long as I am paying for their help with my taxes, I am more than willing to pick and chose who is worthy of what.

      Reply

      • July 31, 2020 at 9:19 am, mac said:

        > Did you accept a stimulus check? Did you apply for and receive the enhanced unemployment payments?
        That’s nothing more than a socialistic payoff put through a Republican regime.
        Of course you will say no to the above but I doubt it.

        Reply

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