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Community Conversation - ALICE
- 1. ALICE: • Asset Limited • Income Constrained • Employed
- 3. Michigan ALICE Research Advisory Committee • Luke Shaefer, University of Michigan • David Clifford, Eastern Michigan University • David Callejo Perez, Saginaw State Valley University • Lee Coggin, College President Baker College of Muskegon • Brian Pittelko, W.E. Upjohn Institute for Employment Research • Bridget Timmeney, W.E. Upjohn Institute for Employment Research • Jane Johnson, Department of Human Services - Muskegon County • Greg Pordon, Department of Human Services - Washtenaw County • Joshua Long, Data Driven Detroit • Peter Ruark, Michigan League for Public Policy • Amy Palmer, Lenawee United Way • Jennifer Callans, United Way for Southeastern Michigan • Barbara Mitzel, Consumers Energy • Huda Fadel, Blue Cross Blue Shield of Michigan
- 4. What does the ALICE Report describe? Household Survival Budget ALICE Threshold ALICE Income Assessment Economic Viability Index
- 5. What is a Household Survival Budget? Cost of 5 household essentials: 1. Local housing 2. Childcare 3. Food (Thrifty) 4. Transportation 5. Healthcare 6. Taxes and 10% Misc. No dining out or savings, 1 car, no frivolous expenses
- 6. Michigan Household Survival Budget Monthly Costs – Michigan Average - 2012 Single Adult 2 Adults w/2 in childcare Housing $474 $643 Childcare 0 1,098 Food 196 592 Transportation 345 690 Health care 129 514 Miscellaneous 127 381 Taxes 131 277 Monthly Total 1,402 4,195 ANNUAL TOTAL $16,818 $50,345 Hourly Wage 8.40 25.17
- 7. Daily Record, 9.3.12 Household Thresholds in 2012 • Federal Poverty Level (3 people): $19,090 • ALICE Threshold under 65 years old: $35,000 - $45,000 • ALICE Threshold over 65 years old: $20,000-25,000 Source: American Community Survey, 2012; and Household Survival Budget Who is ALICE? In Michigan, 40 percent of households have income below theALICEThreshold Poverty (605,210 HHs) 16% ALICE (930,503 HHs) 24% Above ALICE Threshold (2,281,536 HHs) 60% Michigan Households by Income, 2012
- 8. 8 Source: American Community Survey, 2012; and Household Survival Budget
- 9. Consequences of Households Living Below the ALICE Threshold • Housing • Child care and education • Food • Transportation • Health and health care • Income • Savings
- 10. ALICE Income + Assistance
- 11. 13% Gap Need: Approx. $8.5 billion in additional wages & resources
- 12. $15/hr = $30,000/yr Source: Bureau of Labor Statistics, Occupational Employment Statistics (OES) Wage Survey - All Industries Combined, 2012. - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 Less than $20 $20-$40 $40-$60 $60-$80 above $80 Number of Jobs in MI by hourly wage, 2012 $20-30/hour $30-40/hour less than $10/hour $10-15/hour $15-20/hour 63% 30% 6% 0.4% 0.4% 63% of jobs in Michigan pay less than $20/hour
- 13. 13 Top 20 Service Sector Occupations, Michigan 2012 Occupation Number of Jobs Median Hourly Wage Retail Salespersons 130,620 9.99 Office Clerks 111,320 13.30 Cashiers 91,320 9.13 Registered Nurses 90,540 30.69 Food Preparation, Including Fast Food 86,240 8.70 Customer Service Representatives 73,280 14.61 Waiters and Waitresses 69,790 8.78 Janitors and Cleaners 69,780 10.76 Team Assemblers 66,230 14.88 Stock Clerks and Order Fillers 62,670 10.24 Laborers and Material Movers 59,760 12.20 Sales Representatives 52,130 25.04 Nursing Assistants 51,490 12.34 Operations Managers 49,620 43.26 Heavy Truck Drivers 48,220 18.05 Secretaries and Administrative Assistants 45,710 15.89 Bookkeeping and Auditing Clerks 42,780 16.88 Teacher Assistants 41,390 12.90 Home Health Aides 36,460 9.92 First-Line Supervisors of Retail Sales Workers 36,310 17.07
- 14. Michigan Household Stability Budget Monthly Costs – Michigan Average - 2012 2 Adults, 1 Infant, 1 Preschooler Stability Survival Percent Difference Housing $961 $643 49% Childcare 1,504 1,098 37% Food 1,101 592 86% Transportation 1,109 690 61% Health care 955 514 86% Miscellaneous 563 381 48% Savings 563 -- Taxes 946 277 241% Monthly Total 7,701 4,195 84% ANNUAL TOTAL $92,409 $50,345 84% Hourly Wage 46.20/hour 25.17/hour
- 15. Meet ALICE
- 16. ALICE and Community Impact strategies
- 17. Discussion • What is your reaction to the information presented today? Did anything surprise you? • What are the primary issues that need to be addressed to ensure a strong foundation for those families living below the ALICE Threshold? • What is the role of the community in helping these families thrive? • What about government? • Business? • Nonprofits? • Individuals? • Your organization? • How should these organizations and sectors collaborate to address the issues that will make a difference in the lives of families living below the ALICE threshold? Are any of them doing this now?
- 18. Next Steps Begin Conversations Engage the Broader Community Develop Collaborative Strategies Here’s how you can help: • Suggest where else we should share this information • Identify places and people with whom you will share it
Editor's Notes
- Meet ALICE; ALICE is Asset limited, Income Constrained, Employed Can you think of what we have called people who are in this financial status? (audience will often come up with ‘working poor’ or ‘underemployed’) People we know People we need People we care about College students and recent grads – working and tuition debt Young families – struggling to pay for child care AND work Underemployed – less than full-time work and no benefits Military – travel and demanding job People with disabilities – less income, more costs Family caregivers – for people with disabilities and seniors Seniors - loss of income, costs rise, health issues ALICE moves in and out over time!
- The ALICE project is anchored by the ALICE report Stephanie Hoopes Haplin, School of Public Affairs and Administration, Rutgers University -
- The Household Survival Budget calculates the actual costs of basic necessities (housing, child care, food, health care, and transportation) in Michigan, adjusted for different counties and household types. The Household Survival Budget is used to define the average level of income, or the ALICE Threshold, a household needs to afford the basics. The ALICE Income Assessment is calculation of all sources of income, resources, and assistance for ALICE and poverty-level households. The Assessment reveals a significant shortfall from what is needed for households to attain the ALICE Threshold. The Economic Viability Index evaluates the economic and community conditions in each county which make it easy or difficult for a household to support themselves financially.
- Miscellaneous includes 10% contingency for cost overruns in other categories.
- [The table above could be modified to show the survival budget for the county(ies) in which the conversation is taking place. Within the ALICE Report PDF go to your county page in Appendix J, click Edit, click take a snapshot, and pull the curser over Household Survival Budget table] The Household Survival Budget calculates the actual costs of basic necessities: (housing, child care, food, health care, and transportation) in Michigan, adjusted by different counties and household types. The housing budget is based on HUD’s Fair Market Rent (40th percentile of gross rents) for an efficiency apartment for a single person, a one-bedroom apartment for a head of household with a child, and a two-bedroom apartment for a family of three or more. Rent includes the sum of the rent paid to the owner plus any utility costs incurred by the tenant. Utilities include electricity, gas, water/sewer, and trash removal services, but not telephone service. If the owner pays for all utilities, then the gross rent equals the rent paid to the owner. The child care budget is based on the average annual cost of care for one infant and one preschooler in Registered Family Child Care Homes (the least expensive child care option). The food budget is based on the Thrifty Level (lowest of four levels) of the U.S. Department of Agriculture (USDA) Food Plans: Cost of Food at Home, U.S. Average, June 2007. Transportation budget - In the counties where 8 percent or more of the population uses public transportation, the cost for public transportation is used; in those counties where less than 8 percent of the population uses public transportation, the cost for auto transportation is used instead. Public transportation includes bus, trolley, subway, elevated train, railroad, and ferryboat. Car expenses include gas and motor oil and other vehicle maintenance expenses, but not lease payments, car loan payments, or major repairs. The health care budget includes the nominal out-of-pocket health care spending on health insurance, medical services, prescription drugs, and medical supplies using the average annual health expenditure reported in the CES. The health budget does not include the cost of health insurance. (ONE CRISIS AWAY FROM FALLING INTO POVERTY)
- [Use this slide to point out the percent of households living below the ALICE Threshold in the county(ies) represented by the organization hosting the conversation] Also, insert a slide from the ALICE Report PDF go to your county page in Appendix J ‘How many households are struggling’, click Edit, click take a snapshot, and pull the curser over the band showing Poverty, ALICE household number and percent and paste into slide.
- The consequences of Households living below the ALICE threshold are far reaching and are not just consequences for the ALICE households, but for the broader community as well. When people live in substandard housing or become homeless, they become stressed or absent workers; they have to rely more heavily on the public system of services and supports. When they can not make ends meet, their children are often placed in substandard child care settings, which leads to future learning and education challenges. When they can not afford healthy foods, they eat less healthy foods or they go hungry leading to poor health and/or obesity and lower productivity as students and workers. Without a car or reliable transportation, ALICE households have more trouble making it to work on time or at all. When they are underinsured or uninsured, ALICE households forego preventive health care and have out-of-pocket health care expenses that they cannot afford to pay. They are more likely to report to work sick or be absent from work. Not having enough income to even make ends meet leads to high levels of stress, no savings, and greater likelihood for needing additional assistance from the public system of services and supports. Low income means minimal or no savings. This creates mental stress; small auto or appliance repairs can represent a major setback; ALICE households are more likely to use costly alternative financial systems (like payday loans) to bridge gaps.
- Assistance from various sources is not enough to help families below the ALICE Threshold reach the level of income required to meet the Household Survival Budget. Increasing the percentage of households above the ALICE threshold will take a large scale community effort. Only when all sectors of our community come together, can we elevate ALICE. (Nonprofits are 4% of ALICE income. - we have a role, but it cannot be our responsibility alone.)
- They would need even more $$$ and resources to survive. Costing everyone more. Takes more effort to move them out of poverty back into ALICE….if they ever get there.
- Above $80/hour = 7,590 jobs http://lwd.dol.state.nj.us/labor/lpa/employ/oeswage/oeswage_index.html
- Service sector jobs have become an essential and dominant component of Michigan’s economy. Service sector jobs tend to pay low wages. All but three of the top twenty pay less than $20 per hour. Only registered nurses, sales representatives, and operations managers earn more. With most of these jobs, workers cannot afford the Household Survival Budget.
- [The data in the table could be modified to show the stability budget for the county(ies) in which the conversation is taking place.] Unfortunately, living on the survival budget, which most of the occupations in the previous slide don’t even cover, won’t help ALICE get ahead. To do that ALICE needs almost twice as much income. The Household Stability Budget is reflects the cost for household necessities at a modest but sustainable level. It adds a savings category, and is adjusted for different counties and household types. The housing budget is based on HUD’s median rent for a one-bedroom apartment, rather than an efficiency, at the Fair Market Rent of 40th percentile, for a single adult; the basis is a two-bedroom apartment for a head of household with children; and housing for a family is based on the American Community Survey’s median monthly owner costs for those with a mortgage, instead of the Household Survival Budget’s rent for a two bedroom apartment at the 40th percentile. Real estate taxes are included in the tax category below. The child care budget is based on the cost of a fully licensed and accredited child care center. These costs are typically more than 30 percent higher than the cost of registered home-based child care used in the Household Survival Budget. The food budget is based on the USDA’s Moderate Level Food Plans for cost of food at home (second of four levels), adjusted for regional variation, plus the average cost of food away from home as reported by the Consumer Expenditure Survey. Where there is public transportation, family transportation expenses include public transportation for one adult and gas and maintenance for one car; costs for a single adult include public transportation for one, and half the cost of gas and maintenance for one car. The health care costs are based on employer-sponsored health insurance at a low-wage firm as reported by the U.S. Department of Health and Human Services in the Medical Expenditure Panel Survey (MEPS). Also included is out-of-pocket health care spending as reported in the Consumer Expenditure Survey. The Household Stability Budget also includes a 10 percent line item for savings, a category that is essential for sustainability. This provides a cushion for emergencies and possibly allows a household to invest in their education, house, car, and health as needed.
- If possible, bring a member of the community who is living near the ALICE threshold to tell their story to those gathered for the discussion.
- People living below the ALICE Threshold are likely to need help in a variety of ways, including to improve and maintain their health, opportunities to earn a livable wage, and education to gain new skills.