The official Federal Poverty Measure (FPM) that is used today provides an oversimplified depiction of poverty in America and has not been accurately updated to reflect the true cost of living. The FPM was created in the mid 1960’s and has been updated annually based on inflation using the Consumer Price Index. The measure was developed by taking the cost of a minimum food diet and simply multiplying it by three to account for all other household expenses.
The Federal Government saw the shortcomings of the FPM and in 2011 introduced the Supplemental Poverty Measure (SPM). The SPM gives a more detailed depiction of poverty in America and varies both geographically and by household makeup, it also includes benefits as income. However, both measures fail to capture the total number of Americans who are living a life of constant financial struggle.
To bring to light the actual number of families coping with financial insecurity, the United Way started the ALICE Project. ALICE stands for Asset Limited, Income Constrained, Employed. The ALICE thresholds describe a huge section of society that is employed yet still not earning enough to live comfortably, make investments, and save for the future. Unlike the FPM and SPM, the ALICE thresholds use a complex measurement to calculate the bare-bones cost of a household budget. This includes housing, food, transportation, health care, child care, taxes, and miscellaneous items like basic household goods and clothing.
Currently the ALICE Project spans 15 states and represents about 40 percent of the U.S. Population. According to their current research, a minimum of 31 percent of households in each state don’t have enough income to afford what the United Way deems a household survival budget. In Pennsylvania that number is 41.7%. The United Way attributes the extreme number of ALICE households to a variety of factors including low-wage jobs, high cost of living, and economic challenges like affordable housing and local job opportunities.
Although the unemployment rate is at a seventeen-year low, the research gathered through the ALICE Project shows that Americans aren’t necessarily better off. There are too many hardworking members of our communities that are still struggling to make ends meet. In a time when affordable housing is lacking, and low-wage jobs have the highest amount of growth, the ALICE thresholds present a more complete picture of life in America.
For more information visit their website: https://www.unitedwayalice.org/home
The full Pennsylvania report will be released within the year.
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