ALICE - Asset Limited, Income Constrained, Employed - Households that earn more than the Federal Poverty Level, but less than the basic cost of living in that location. In Michigan, 43% of all households are living either at the Federal Poverty Level (14%) or are considered ALICE households (29%). In both cases, these households are struggling to afford basic needs.
In a report released a few weeks ago by the Michigan Association of United Ways, ALICE is described as Michiganders who work hard, but still can't seem to make ends meet. They receive low wages, often work reduced hours, and have depleted their savings. ALICE crosses boundaries of race/ethnicity, age, geography, and employment status. Those hit particularly hard in Michigan are residents under 25 who are unable to afford to live on their own, and those over the age of 65. The top 2 jobs in Michigan (based on the number of individuals in those jobs) are retail sales and food prep and serving workers. The median wage for the top 2 jobs in Michigan is $10.55 and $9.43 per hour respectively. Individuals in these jobs are part of the ALICE population in Michigan.
As businesses seek new ways to improve productivity and reduce costs, they often shift to more flexible, short term staffing models that enable them to scale up or down as needed. This makes it difficult for workers to pay bills regularly, make arrangements for and pay for child care consistently, or qualify for a mortgage. In this scenario the responsibility for health insurance, retirement and other coverages like dental and vision often shifts to the employee. All of these factors create tremendous stress for the ALICE individual or family.
In a report that came out this week from the National Alliance to End Homelessness, two factors were identified as the top tipping points into homelessness - living doubled up and being severely housing-cost-burdened. Living doubled up is just that - an individual or family living with someone else and sharing their living accommodations. Those who are severely house-burdened are those who spend more than 50% of their income on rent. Obviously, it would take very little for people in either situation to tip into homelessness. Many ALICE individuals and families can be found in these situations.
The household "survival" budget for an ALICE individual reflects an income of $21,000 per year - just over $10/hour working 40 hours per week. This "survival" budget includes a budget of 30% of gross income for housing ($509 per month - which includes utilities), $6.45 per day for food, transportation costs to get them to and from work, basic health care (no dental or vision, and no significant illnesses), a cell phone to be able to remain in contact with their employer (budgeted at $55 per month), payroll taxes, and "miscellaneous" of $159 per month to cover everything else (including things like clothing, dental and vision, a significant illness, repair and replacement of household items, and maybe something fun to do occasionally). Is it any wonder that these individuals are the ones who teeter on the edge of homelessness?
As the population of seniors in Michigan is projected to continue to increase (from about 18% of the total state population today to 23% of the total state population in 20 years), the stress of the ALICE population will increase. Not only will the number of seniors increase, but the number of caregivers for those seniors will need to increase as well. Today the average wage in Michigan for a personal care aide is $10.61 - qualifying those workers as ALICE.
All of this reinforces the need for additional affordable housing and services in Michigan for these low income individuals, especially smaller, affordable rental units. Young millennials prefer housing near mixed-use, walkable centers with shopping, restaurants and public transportation. Seniors generally want housing that is accessible to family, health care and other services. In addition to developing more affordable rental units, job training with access to higher-paying jobs is much-needed for the younger ALICE workers. Seniors will need available, trained care givers who are not teetering on the edge of collapse themselves. People want a hand up, not necessarily a hand out. Let's be there to make the changes needed to leave ALICE behind.