CEDAR RAPIDS — The latest United Way ALICE report has found that more than one-third of Iowa’s households are unable to afford the state’s cost of living.
Released Tuesday, United Way’s 2018 ALICE — Asset-Limited, Income-Constrained, Employed — report states that 457,044 Iowa households, or 37 percent of the state’s total, are unable to meet basic needs. That marks a considerable increase from 31 percent of households in 2016.
The report, presented by sponsor Alliant Energy, spotlights those who work at low-paying jobs, have little to no savings and are considered one emergency away from falling into poverty.
About 12 percent of Iowa’s households live below the Federal Poverty Level and an additional 25 percent — while considered above the poverty threshold — are unable to cover basic expenses like housing, food, transportation and health and child care.
“This really shows that many, many more people than that are struggling, even if they’re hard working. It’s not people who just don’t want to work, it’s people that are working hard trying to make the best of their lives every day,” Shane Orr, with United Way of Muscatine and United Ways of Iowa’s Board Chair, said in a Tuesday media call. “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.”
Stephanie Hoopes, lead researcher for the ALICE report, said the report helps show that it’s not only those living below the Federal Poverty Level that are struggling to make ends meet.
“If you only look at those federal measures you would have a much different view of financial hardship,” said Hoopes.
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In Linn County, approximately 20 percent of the county’s 89,173 households fell below the ALICE threshold in 2016. Another 10 percent were under the poverty line.
Of Johnson County’s 57,217 households in 2016, 18 percent fell below the ALICE mark and another 20 percent were under the poverty line.
Both counties saw the number of households in the ALICE threshold and under the poverty line increase from 2014-2016, according to the report.
It’s a trend seen across the state, said Leah Rodenberg, with Alliant Energy Foundation, the ALICE report’s presenting sponsor.
“As a provider of energy services to Iowans, we know many of our customers struggle with their basic household budgets. This data will provide a greater understanding of the struggles of hard working families in each of our 99 counties and the conditions that define their financial hardships,” she said.
The 2018 ALICE report also found the statewide cost of a family budget increased by 41 percent from 2010 to 2016 — to more than $56,000 for a family of four. That’s more than four times as much as the national rate of inflation, which was about 9 percent, over that span.
Meanwhile, two-thirds of Iowa’s jobs pay less than $20 an hour.
“We see this cost of living increasing, faster than inflation and faster than wages,” Hoopes said.
But while state and local lawmakers have clashed over Iowa’s minimum wage rules, with the state last year pre-empting local rules and re-establishing $7.25 an hour as the statewide rule, Hoopes said employee pay is just one piece of the puzzle when it comes to helping those in financial hardship.
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“We also know from looking at ALICE that that alone would not make the difference,” Hoopes said. “While increasing wages is certainly an important thing to discuss, we hope that doesn’t eclipse all the other work that needs to be done to make a difference for these families.”
Other areas that stakeholders, service providers and policymakers need to consider include shifting populations as millennials become a more prominent part of the workforce and baby boomers enter retirement; instability in the market through economic disruptions or natural disasters; and growing inequality in health care — as medicine advances, it becomes more and more expensive.
“Sadly there is no single solution to fix the challenges so many in Iowa face. These challenges are complex and interwoven,” Orr said.
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