ALICE is Everywhere

ALICE is Everywhere

By Corey Smith at The Daily News on March 31, 2022

Montcalm, Ionia households struggling on ‘bare-bones’ budgets have become ‘rent-burdened’ due to flat wages, rising costs

BELDING — When addressing the issue of affordable housing, one element of that crisis can be identified through a specific demographic of people — ALICE. ALICE is an acronym used to identify those who are “Asset Limited Income Constrained and Employed.” More specifically, it identifies those households that generate enough income to place them above the federal poverty line, but below a “household survival budget” — the bare minimum of costs of necessities such as housing, childcare, food and transportation.

As the vice president of impact & engagement at United Way of the Battle Creek and Kalamazoo Region, Alyssa Stewart spoke at length on ALICE and its use as an evaluation tool regarding affordable housing during the annual United Way Montcalm-Ionia Community Leadership Conference on March 18 at Belding High School. According to Stewart, who localized the statewide data specifically to Montcalm and Ionia counties, people identified as “ALICE” are more prevalent in the area than most might realize. “ALICE is everywhere,” she said. “ALICE is teaching kids in school, ALICE is caring for your children, ALICE is caring for those people that you love. If you went to a store today, if you went to a gas station — all of these essential workers we have grown to appreciate more than ever — they are ALICE. “ALICE is also invisible, sometimes we don’t see ALICE,” she continued. “ALICE has high school diplomas, associate degrees, bachelor’s degrees and Ph.D.s. There are adjunct professors in our communities who are ALICE.”

According to data from the 2019 ALICE report presented by Stewart, both Montcalm and Ionia counties have more ALICE households than the statewide average of 25%. With a median household income throughout the county of $49,448 in Montcalm, 29% of households are ALICE households. With a median household income of $57,043 in Ionia, 26% of the households are ALICE households. Additionally, Montcalm possesses a poverty rate of 14% and Ionia a rate of 11%, meaning 43% of households in Montcalm and 37% of households in Ionia either struggle to make ends meet or sit below the poverty line.

While ALICE households statistically make enough to pay either rent or a monthly house payment, Stewart said a variety of factors make it nearly impossible for these individuals and families to secure stable housing. She painted a picture of a household in Montcalm County with two working parents who have two children in child care, describing how difficult it is in such a scenario to move beyond the survival budget.

“These are households that have earned income, but they are people with one, two or even three jobs in some cases, working to make ends meet,” she said. “And yet, because of the cost of living, they have little to no savings for emergencies, for investing in their future, for things like homeownership, retirement and higher education.” In her Montcalm County scenario, Stewart said the annual total income for two adults with two children in child care to meet the “bare-bones” budget as outlined in the ALICE report is $60,684. “If they are both making $10 an hour, they are below this,” she said. “If they are both making $15 or $16, they could start to get above this survival budget.” However, that determination utilizes data regarding housing, transportation, food and health care that likely are below what most families are paying. For example, when determining average monthly rent or mortgage payments, the ALICE report uses the U.S. Department of Housing and Urban Development’s “Fair Market Rent,” which utilizes the 40th percentile of gross rents. Per the ALICE report, that figure amounted to $758 per month for Stewart’s Montcalm County family — an amount she said is far lower than the average current housing costs. “The reality, in our current housing environment, is that housing at the 40th percentile is often not available,” she said. “That means their real costs are likely much higher than we saw in that survival budget, which essentially means they are rent-burdened (spending more than 30 percent of household income on rent).

With that in mind, even the survival budget is lower than reality. People’s costs are deviating from that on a month-to-month basis.” Additionally, Stewart said many ALICE households rely on income that pays hourly, which can cause unpredictability in budgeting. Anything below $20 an hour is considered a lower-wage job and a record-high 58% of jobs were hourly in Michigan in 2019. Only 25% of working-age adults had the security of a full-time job with a salary.

“There’s nothing wrong with hourly work, but it can create more volatility — unpredictability in hours, overtime, slowdowns — which can make it more difficult to budget and plan for a household,” she said. Compounded on top of that, Stewart said two factors have resulted in a growth in ALICE households year upon year: Increased cost of living and flat wages. “First, we have seen consistently an increased cost of living,” she said. “Inflation happens every year, the cost of living goes up, but if you just isolate the cost of living to the essentials, we actually see a higher increase — 3.4% annually — than we see in the consumer price index of 1.8% annually. “Number two, wages are flat overall,” she continued. “Where there is growth, it’s often in hourly, lower-wage jobs. The combination of these two things — cost of living going up and flat wages — result in the growth of this ALICE population.”

Stewart said systemic inequities and age-based disparities also play a role, pointing out that per the ALICE data, single female-headed households are much more likely to be living below the ALICE threshold than single male-headed households. In Montcalm County, this disparity is observed at 85% for women vs. 53% for men, and in Ionia County, those rates are similar at 80% vs. 50%. Additionally, households with individuals younger than the age of 25 and older than the age of 65 have higher-than-average ALICE rates.

While race also plays a factor in ALICE rates, Stewart said neither Montcalm nor Ionia counties had enough of a minority population to generate a sample size large enough to analyze data effectively. However, United Way Montcalm-Ionia Executive Director Terry Legg said the data is likely incomplete as it does not account for undocumented migrants. “In our community, there is a very hidden, not-talked-about population that is very forgotten — our Hispanic population that is here undocumented as a result of our migrants,” she said. “We saw over and over throughout the pandemic, our migrants did not get any support. We have a huge population of Hispanics that are here. The parents might be illegal, but the children were born here in the states. That’s something that we really need to take the blanket off of and address. That’s the one disparity that is not documented anywhere, that really does happen here.”

According to Stewart, what further complicates matters is that while many resources are in place to help assist households out of poverty, once they arrive at the level of being an ALICE household, those support systems disappear. “The positive is that poverty is trending downward — that’s excellent,” she said. “The poverty line is exceedingly low. Folks living below that poverty line are truly struggling on a daily basis so we love to see that number decreasing. “However, many folks are moving from poverty into ALICE, which is not always a much better place to be,” she continued. “They may now not be eligible for benefits or other supports, but they are still struggling based on that survival budget. If they are moving up into ALICE and still struggling every single day with even less support, then we are not doing the best we can for them.”

In terms of finding a solution to move ALICE households above that survival budget threshold, Stewart said local and state organizations need to begin placing a focus on helping those who are above the federal poverty line. “Data is just data unless we utilize it to better see and understand our neighbors and community members, but also, it’s just data unless we act on it unless we do something with that data,” she said.

“We all know people who are struggling, but we also don’t know people who are struggling, who are carrying the weight and anxiety — that low-level anxiety that if one thing goes wrong, they would have no idea what they would do. “When you are living on that survival budget, you do not have a choice,” she continued. “You can’t always move to the neighborhood you want to live in, you can’t always get your kids into the school district where you wish they could be, you can’t choose the child care you wish you could because your choices are constrained. That is where I think, as a system, as a community, in many ways, we are failing our ALICE neighbors. Our systems can be better adapted to support families that are in that space above poverty. Once folks can get above that survival threshold, they can start to work toward stability. They can start to build assets. They can have greater choice.”

To see the PDF versions please click here. Part 1, Part 2.