Nonprofits and Real Estate

ALICE can’t afford to live here

Study finds nearly 1 in 4 Kent County households are struggling to cover basic needs.

January 20, 2017
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Despite being employed, 24 percent of households in Kent County are struggling to pay their bills.

That is because typical hourly wages in the most available jobs are not enough to adequately cover basic everyday expenses, such as housing, childcare, utilities, food and health care costs.

Heart of West Michigan United Way has been participating in a study of asset limited, income constrained, employed (ALICE) families since 2014, following the first such study, which was conducted in New Jersey in 2009.

The New Jersey network of United Ways, in partnership with Rutgers University, originally sought to quantify what has previously been termed the “working poor.” Since that time, several other United Ways have initiated studies in their states.

“The United Way in New Jersey got together with Rutgers to quantify who is working but unable to survive or barely surviving,” said Ellen Carpenter, vice president of marketing and volunteer center at Heart of West Michigan United Way.

She said those are families who are one unexpected and unavoidable expense away from being in crisis. For example, an auto repair bill could cripple the family’s budget for rent, utilities, food, transportation and health care.

Carpenter said many people don’t realize their neighbor or co-worker or an employee might be struggling to make ends meet.

“These are everyday people, the fabric of our community,” she said. “Think the person fixing your car, cleaning your room or the person helping your grandmother at the nursing home.”

Based on the most recent ALICE data collected by Heart of West Michigan United Way, a two-adult, two-child family in Kent County needs to earn $27.20 per hour just for basic survival, and for a “stability budget,” that same family needs to earn $50 per hour.

Carpenter said for individuals who qualify for some form of federal assistance, an hourly wage increase might actually cause more harm than good to the family budget.

“It’s called the wage cliff,” Carpenter said. “At $17 per hour, they make too much to qualify for assistance but not enough to meet their basic needs.”

In fact, Carpenter said sometimes an employee will quit a job rather than accept a dollar or two dollar-an-hour wage increase, because that raise would cause a negative impact on the family’s budget overall due to a loss in benefits that can’t be made up by the hourly increase.

“West Michigan isn’t insulated from this issue,” Carpenter said. “Many people are surprised by that, especially with our low unemployment.”

She said unemployment numbers don’t tell the “real story.”

“Jobs available in Michigan, most are in ALICE occupations,” Carpenter said.

Some examples of ALICE occupations (including median hourly wage) include retail salesperson ($9.99), office clerks ($13.30), cashiers ($9.13), registered nurses ($30.69), food preparation, including fast food ($8.70), customer service representatives ($14.61), and wait staff ($8.78).

According to data gathered in 2012, 63 percent of jobs in Michigan pay less than $20 per hour. Jobs paying $40-$60 per hour make up only 6 percent of the jobs in the state.

Carpenter said there also are marked disparities related to race and ethnicity in the ALICE data.

The data found 70 percent of African American households in Kent County fall below the ALICE threshold, 61 percent of Hispanic households, 41 percent of Asian households and 35 percent of white households.

The median wage for white workers has declined 1 percent from 1982 to 2012, while the median wage for African American workers has fallen by 24 percent over that same period.

“This is a clear issue facing our county that needs to be addressed,” Carpenter said. “This helps put data behind the Forbes article that found Grand Rapids second to last (economically for African Americans). We have to solve some of these issues.”

Carpenter said three core areas are considered in looking at a county’s economic conditions: housing affordability, job opportunities and community support.

In Kent County, overall job opportunities and community support are considered in good stead, but housing affordability is considered poor.

“The affordable housing is in Wyoming and Kentwood,” she said.

That can be an issue for families struggling to meet their transportation needs.

“Public transportation is focused on downtown, but that isn’t where affordable housing is,” she said.

Carpenter said Heart of West Michigan United Way is using the ALICE data to inform its funding decisions going forward.

“How do we help ALICE families get the skill sets they need to get the better jobs that get them over the wage cliff?” she said. “And what are the supports required from us as a community? How do we help with childcare, transportation, all the barriers to decent housing, schools, etc?”

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