Study: 31 percent of Iowa households struggle to afford basic needs

A statewide report says one in every three Iowans struggle to afford their basic household needs.

Released Wednesday by United Ways of Iowa, the Asset Limited, Income Constrained, Employed (ALICE) financial hardship study found that 381,266 Iowa households - 31 percent - struggled with financial needs in 2014.

Heather Hennings, President & CEO of the United Way of Siouxland and Incoming United Ways of Iowa Board Chairperson, said the ALICE study found the number of Iowans dealing with financial hardships in 2014 to be much higher than the 12 percent who fell below the federal poverty level.

'ALICE represents a growing number of individuals and families who are working, but are unable to afford the basic necessities such as food, housing, child care, health care and transportation,” Hennings said during a Wednesday conference call. 'ALICE families live paycheck to paycheck and most often they have nothing left to navigate any unexpected expenses they may have such as a car repair, an illness or even a job loss.”

Stephanie Hoopes, lead researcher for the ALICE report, said the number of Iowans dealing with financial hardships has been increasing - from about 29 percent in 2007 to 30 percent in 2010 - despite the nation's ongoing recovery from the 2008 economic recession.

'That recovery is happening slowly and we're seeing that, actually slightly more people are in poverty and in ALICE,” Hoopes said.

The ALICE report focuses on the cost of five essential expenses - housing, child care, health care, transportation and food. Cost of living and wages are assessed on a county-by-county basis.

The report states that 75 percent of Iowa households don't have access to funds or savings in case of emergencies - a trend present for all ages, but is becoming increasingly worrisome for some of the state's oldest residents, said Hoopes

'We're seeing people going into retirement without the resources that they were planning on,” Hoopes said.

According to the report's county-by-county data, 35 percent of Johnson County and 24 percent of Linn County households fall under the ALICE threshold.

The report found that more than 68 percent of all jobs in Iowa pay less than $20 an hour, with most paying between $10 and $15 per hour, according to the report.

But while a growing number of Iowa counties pick up conversations on local minimum wage increases, Johnson County is on its way to $10.10 an hour and Linn County is eying an $8.25 minimum wage, Hoopes said it's important to remember that there isn't on fix-all to financial insecurity.

Factors like affordable housing and the cost of social services are other factors to keep in mind.

'This is a multifaceted issue. There are a lot of different issues that play into it, but a minimum wage is probably one of them,” she said. 'We hope that, by releasing this project we'll have people focusing on the range of things that make the difference and not just think there's one solution.”

Individual United Way organizations will use the ALICE report to implement their own programs to address financial insecurity in Iowa.