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ALICE: ‘The new face of poverty’ — United Way report documents plight of working poor

The Warren Sentinel

FRONT ROYAL — It's not exactly news to most Warren County residents that many of their neighbors work full time and still have trouble making ends meet.

However, we can now quantify that number — about 49 percent of Front Royal households and 27 percent of households countywide — thanks to a study released Tuesday by the Front Royal-Warren County and Northern Shenandoah Valley United Way chapters.

Combined with the 10 percent of Warren County households living in poverty, about 37 percent of county households have some kind of continuing struggle to get by.

United Way chapters across Virginia launched Project ALICE last year to better understand the circumstances of people whose income is above the federal poverty level, but who cannot afford a basic household budget of housing, food, child care, health care and transportation.

ALICE is an acronym that stands for "asset limited, income constrained, employed."

"You see these people. You talk to them all the time," Front Royal-Warren County United Way Executive Director Dawn Graves said. "Many times, they will never, ever tell you they are struggling."

The study looked at census and economic data from 2015 and compared it to a "basic household survival budget," computed using actual costs for housing, child care, food, transportation, health care, taxes and miscellaneous expenses, Northern Shenandoah Valley United Way President and CEO Nadine Pottinga said. The federal proverty level is calculated as three times the minimum food cost.

The basic household survival budget is different for each municipality because of differences in local economies. In Warren County, basic survival cost about $23,772 in 2015 for a single adult or $65,172 for a household with two adults, an infant and a preschooler. The 2015 federal poverty-level income for a single adult was $11,770, less than half the cost of the basic survival budget calculated by the United Way. The poverty level for a family of four was set at $24,250.

The federal poverty threshholds were updated in January to $12,082 for a single adult and $24,600 for a family of four, still far short of the survival budget calculated in the report. Any applicant for government assistance making $1 more than those income limits would be turned down, but they would struggle just as much as qualifying applicants and there often is no help available for them, the United Way officials noted.

"What do we do about it?" Graves asked. "How do we start providing them with resources?"

Sue Dyer of Winchester shared her experience as a member of an ìALICE householdî at the United Way joint news conference Tuesday morning at the Handley Library in Winchester.

Dyer works full time at a preschool in Winchester. She has two grown children and one about to enter her senior year in high school. Her husband has been disabled since 2005. His disability check helps, but not enough to keep Dyer from worrying about whether there is enough money to buy bread and milk when she goes to the grocery store.

"We struggle from week to week," she said.

Dyer noted that her daughter recently had senior pictures taken.

"They're gorgeous, but I canít afford them," she said, adding that she hopes to save up enough to buy one of them.

Pottinga said she's been asked what surprised her about the findings of the report.

"I think what surprised me is that nothing surprised me," she said. "We've been hearing stories like Sue's from our partner agencies."

There are four primary factors contibuting to the high number of "ALICE households," Pottinga said. They are low wages, the rising cost of living outpacing wages, the impact of the Great Recession and the fact that public and private assistance provide a quick fix, but do not encourage stability.

Unemployment is relatively low in Warren County and across the state. However, more than 57 percent of jobs statewide pay less than $20 per hour ó equivalent to an annual salary of $41,600. Most of those jobs pay between $10 and $15 per hour, according to the report. Those jobs — especially service-related ones that require a high-school education or less — are expected to grow faster than higher-wage jobs over the next decade.

Low wages lead to longer work hours for workers, who may have to take second jobs to make ends meet, as well as pressure on other family members to drop out of school to help support the family. Those workers are less likely to have any savings and more likely to use high-interest financial products, according to the report. For employers and the greater society, that means less productivity at work and higher taxes to fill the income gap. If those workers have vehicles, they are likely to be older and less reliable than newer transportation, which also can contribute to the worker being tardy or absent from work, resulting in less productivity.

The conversation, however, is not about wages as much as itís about helping those who are struggling, Graves said, noting that many businesses in places where the minimum wage has increased to $15 per hour have either laid off workers or closed altogether, which defeated the purpose of raising the minimum wage.

In addition, the higher minimum wage results in rising prices, which also defeat the purpose. She said employers can offer assistance in forms unrelated to wages, such as offering flexible hours or help with tuition.

The report found that, even without an increase in the minimum wage, the basic cost of living has risen at a faster pace than wages, with the basic cost to sustain a family of four in Warren County about $3,700 more than the median household income of $61,454.

The Great Recession made conditions worse for ALICE households with its impact on affordable housing, job opportunities and community resources. The housing issue, in particular, has been seen in Warren County, Graves said.

"We have a huge shortage of affordable housing," Graves said. "Now, we have the data to say 'Hey, look. This is what's happening in our community.'"

Substandard housing can have health and safety risks as well as increased maintenance costs for people living in those conditions, but it also can have a broader impact in the form of neighborhood property values.

Workers who have to travel farther for work than they used to also have additional costs associated with gasoline and car maintenance. In the big picture, that means more commuters on the roads and increased infrastructure costs.

In addition, there is a greater likelihood for lost productivity because of worker tardiness or absence in the event of severe weather, unreliable transportation or a personal emergency.

Public and private assistance can help ALICE households make ends meet, but they do nothing to promote sustainability. Even $12.2 million in government, nonprofit and health-care assistance falls short of the amount needed for all Virginia households to meet the ALICE threshhold for economic survival, according to the report. Most government aid is allocated for a certain purpose, which leaves gaps in other areas, the officials noted.

While Warren County's poverty figures have improved since 2007, its ALICE percentage has become worse. In 2007, about 11 percent of county households were in poverty, while the report identified about 21 percent as ALICE households. In 2010, the poverty figure rose to 13 percent while about 20 percent were identified as ALICE households. Those figures were 10 and 24 percent in 2012.

About 10 percent of Warren Countyís 14,364 households in 2015 had incomes below the federal poverty level, according to the report. About 27 percent of households had incomes higher than the poverty line, but still struggled to pay for basic household expenses.

The study also included data on five census-designated places in the county. Shenandoah Shores was second to Front Royal with about 37 percent of its 303 households designated as ALICE households. About 28 percent of households in Shenandoah Farms and Skyland Estates met the criteria, as did about 26 percent of households in Apple Mountain Lake.

The phenomenon hit renters particularly hard. About 64 percent of renter-occupied households were identified as ALICE households, compared to 32 percent of owner-occupied households. About 48 percent of renters and 26 percent of owners budgeted more than 30 percent of their income to housing. The U.S. Department of Housing and Urban Development considers families who pay more than 30 percent of their income for housing to be
cost-burdened.

The data also was broken down by demographics. About 66 percent of Hispanic households were determined to fit the ALICE criteria, followed by 58 percent of Asian households, 49 percent of black households and 35 percent of white households. About 46 percent of senior households also met the criteria.

Graves and Pottinga said the report is intended to begin a discussion to find solutions to the growing problem. They plan to meet with local government officials to share the data and discuss ways they could help find solutions.

They also could help to establish a resource to help ALICE households that currently doesn't exist, Pottinga said, adding that something needs to be done.

"ALICE really is the new face and the new definition of poverty," she said.




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