A decade from the financial crisis of 2008, and many economic indicators seem pretty good: Maryland’s unemployment rate has held steady at 4.3 percent over the summer, while U.S. second quarter growth hit 4.2 percent, the highest rate since 2014.
Why then do so many people feel pinched? asks Stephanie Hoopes, of the United Way.
“With all this good economic news, you would think we would be seeing this across the board and we’re not,” she said.
Hoopes is the lead researcher for the United Way’s ALICE report. That stands for Asset Limited Income Constrained Employed — working people who earn above the federal poverty line, but who nevertheless struggle to make ends meet, or to realize the gains seen over the economy as a whole.
People like Luke Benson, of Westminster. Two years ago, Benson, then 35, was earning $20 an hour as an electrician and struggling to care for his then 9-year-old son.
A United Way study of the working poor shows that 38 percent of Maryland families — and nearly half of Baltimore ones — cannot afford basic necessities, such as housing, transportation, food and child care.
“I am not doing better financially but being at Penguin Random House has made my life much better. The benefits are great and I am close to home so I get to spend more time with my family,” he said. “I don’t want to apply for any assistance because it should be for people that are truly struggling just to put food on the table whereas I am OK; I’m not well off but we manage.”
In Carroll County, the survival budget for a family of four is $78,048, and about 27 percent of households learn less than that ALICE survival budget threshold. But that is better than many of the surrounding counties — 36 percent for Baltimore County, 33 percent for Harford, and an improvement, according to Hoopes. And while the percentage of those beneath the poverty line has held relatively steady, the percentage qualifying as ALICE has decreased since 2014.
“Poverty is pretty flat, and that’s pretty consistent across the state, so it seems to be the ALICE numbers that are changing,” Hoopes said. “In most places, those ALICE numbers are increasing, so Carroll County seeing a decrease is kind of against the trend and is good news for Carroll County.”
Such decreases are not always good signs, Hoopes said, as sometimes it simple represents a significant movement of the population out of an area seeking better opportunities.
But Carroll’s low unemployment rate may be part of the story of its good showing in this report.
“Usually, the driver is around employment,” Hoopes said. “If there is a new employer, or someone is expanding and able to increase wages, that’s the kind of thing that really makes a difference.”
Hoopes ultimate wish is for the ALICE report statistics to be used to craft policies that help people climb not just out of poverty, but into a thriving lifestyle. And while the federal poverty level is still widely used, there are those that are adopting ALICE, or at least using the report to inform their policies, Hoopes said, including the Federal Reserves in Dallas, Philadelphia and New York.
“A lot of community colleges have taken their ALICE data and incorporated it into their strategic planning,” she said.
That’s true at Carroll Community College, where several new scholarships were launched in the past year with eligibility criteria based on ALICE data, according to college Vice President for Planning, Marketing, and Assessment, Craig Clagett.
“Carroll County has very low unemployment, the second-lowest poverty rate in Maryland, and a high median household income,” he wrote in an email. “It might be easy to conclude that finances are not a barrier to college attendance for Carroll County residents. But that conclusion would be wrong, and the ALICE data were very persuasive in making that case.”
ALICE data is not part of the program eligibility decisions at Human Services Programs of Carroll County, Inc., but the organization is well aware of the population, according to acting Executive Director Scott Yard. While the bulk of HSP’s programs focus on people who are homeless, ALICE individuals may benefit from many other HSP program, he said.
“Our financial education classes are very good for individuals that have income. They are making money, but it may be new to them,” Yard said. “The family stability program is a prevention program. The goal is that if people are struggling, we get the help and case management so they don’t become ALICE.”
Though despite a counter trend and a shrinking ALICE population, it’s not all positive in Carroll, Hoopes notes. ALICE people in Carroll in particular do have some vulnerabilities.
“In Carroll County, most people work in small firms. The biggest chunk of those small firms have less than 20 employees,” she said. “ALICE is more likely working in these small firms, and there’s a lot more turnover in a small firm. Lower wages and they are less likely to have benefits.”
That explains Benson feeling a little better about his situation even though he is not making much more money than two years ago — the benefits and flexibility are adding to his overall quality of life, he said.
“There are many factors that play into all of that as well and for each family those factors change,” he said. “But I have come to realize over the years that the quality of mine and my family's life isn’t based on income but the amount of time we get to spend with each other and the things we do together.”