MUSCATINE — The number of households struggling to meet basic needs has increased, according to a recent report from United Way.
The Asset Limited, Income Constrained, Employed, or ALICE, report showed that of the 9,357 households in 2016 in Muscatine, 42 percent fell into two categories: below the federal poverty level or above the federal poverty level without earning enough to afford the basic cost of living, also known as the ALICE threshold.
The reported portion of households across the state that are unable to afford basic needs is 37 percent and the report reveals that it’s a multi-faceted issue, affecting all types of households.
“It really isn’t specific to urban or rural, it’s both,” said United Ways of Iowa Executive Director Deann Cook.
The purpose of the report is to bring awareness of the population of people living above poverty that are often forgotten in the conversation of economic struggle.
The report “also helps us break the stereotype that only people below the poverty line are struggling,” United Way of Muscatine Executive Director and United Ways of Iowa Board Chair Shane Orr said. “This really shows that many, many more people than that are struggling even if they’re hardworking. It’s not people that just don’t want to work; it’s people that are working hard, trying to make the best of their lives every day and so the fact that these numbers go up is an indicator to me that despite the low unemployment and all of that it’s still a big issue in the community and a big issue that seems to be getting worse so we need to … use this as an opportunity to look for ways that we can address it as communities to try to improve it,” he said.
In Muscatine County, the household survival budget that consists of housing, food, transportation, health care, technology, miscellaneous expenses and taxes is $1,739 per month and $20,868 per year for a single adult and $4,919 per month and $59,028 per year for a family of four (two adults, infant and toddler). The hourly wage required to cover those budgets is $10.43 and $29.51, respectively. Individuals and families earning less than those amounts but earning more than the federal poverty level, fall into the ALICE threshold.
Budget costs continue to rise faster than the rate of inflation. According to the report, the cost of household basics “increased by 26 percent for a single adult and 41 percent for a family of four in Iowa from 2010 to 2016. In comparison, the national rate of inflation was 9 percent.
At the same time, median earnings increased by only 17 percent in Iowa and 11 percent nationwide, putting greater strain on households. The rise in the Household Survival Budget in Iowa was driven primarily by the addition of a smartphone and substantial increases in the cost of both health care and child care (Bureau of Labor Statistics, 2018).”
The survival budget doesn’t allow for any savings so individuals or families facing sudden expenses would not be able to cover those costs.
United Way ALICE Project National Director Stephanie Hoopes Halpin said minimum wage increase is a popular point of discussion nationwide and “there’s no doubt that an increase in wages would help ALICE families,” but that alone wouldn’t solve the issue.
“In 2016, as the economy approached full employment (defined as less than 5 percent unemployment) in many Iowa counties, ALICE workers were more likely to be employed, but their income still lagged behind the cost of living in most areas. In some cases, the problem is simply low wages. But there is also the challenge of finding full-time, continuous work,” the report read.
“While increasing wages is certainly an important thing to discuss, I hope that doesn’t eclipse the other important work that needs to be done to help these families.”
In Muscatine County, the data from 2016 showed the unemployment rate at 4.5 percent, which was higher than the state average at 3.9 percent.
The report was developed 10 years ago to explain why there are large numbers of applications for grants and aid, when the reported number of people living in poverty is relatively small, according to Hoopes Halpin.
She said the first report was conducted in New Jersey where it was not only well received, but utilized by various leaders, agencies and corporations. The project expanded to neighboring states, then finally to 18 states across the country, she said. The report data is updated every two years and used 2010 census data for the initial report.