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76 percent increase in Washington State's Asset Limited Income Constrained, Employed (ALICE) households

 


OLYMPIA—When COVID-19 hit, just over 670,000 Washington households were already one emergency away from financial ruin—a 10-year record high— setting the stage for the unprecedented economic impact of the crisis, according to the state’s latest Asset Limited Income Constrained, Employed Report (ALICE) released on Tuesday, June 16 by United Ways of the Pacific Northwest, in partnership with United For ALICE.

Over the last decade, Washington’s low-income families systematically lost buying power and financial stability as the high cost of essentials outpaced wages, driving the number of ALICE households to rise 76% by 2018, the report shows.

“We’ve known that our economy was increasingly reliant on these families we call ALICE, who are financially vulnerable to one emergency,” said Jim Cooper, President & CEO of United Ways of the Pacific Northwest. “COVID-19 became that one universal emergency. ALICE families are facing the greatest health and financial risks today, as they are the workers who don’t have health insurance, have no paid sick days, and whose children receive daily meals at school.”

In 2018, of Washington’s 2.9 million households, just over 670,000 were ALICE (Asset Limited, Income Constrained, Employed) a record number that were unable to afford the basics for survival, despite working. That’s in addition to the 285,000 families that were in poverty. While wages for ALICE workers remained largely stagnant, the cost of six essentials grew on average 3.4% annually over the past decade. That’s in contrast to a rate of inflation of 1.8%.

As a result, ALICE households grew to account for 41 percent of Walla Walla County households, and 39 percent of Columbia County households.

“No matter how hard ALICE families worked, the gap between their wages and the cost of basics just kept widening,” said Cooper. “These already fragile ALICE households are now facing an even deeper financial hole due to the state of emergency created by COVID-19.”

ALICE in Washington: A Financial Hardship Study shows that in 2018, the cost of survival ranged annually from $22,524 for a single adult, to $25,848 for a senior citizen and $72,600 for a family of four with an infant and a preschooler. Putting this in perspective, the median hourly wage for a retail salesperson, the most common occupation in Washington, was $13.96, or

$27,920 per year.

The mismatch between wages and costs is revealed by a new measurement debuting in this report, called the ALICE Essentials Index. This Index chronicles how the cost of housing, child care, food, transportation, health care and a smartphone plan rose at nearly twice the rate of inflation, as measured by the Consumer Price Index. The result is that in 2018, two parents working full time needed to earn $18.15 an hour in order to afford the Household Survival Budget for a family of four. That’s up from a wage of $12.50 an hour affording that budget in 2007. During the same period, the number of low-wage jobs grew by a substantial 149%.

The report calls for stakeholders across all sectors to use its findings to remove obstacles to financial stability, identify gaps in community resources and build data-driven solutions to help ALICE families achieve economic stability, bolstering the state’s economy overall.

For more information or to find data about ALICE in local communities, visit http://www.UnitedForALICE.org/Washington.

 

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