News

COVID-19 hit as record number of Ohio families were priced out of survival

Sep 18, 2020

United Way report highlights crisis in the making over 10 years, fueled by high-priced basics and stagnant wages

To read a copy of the report and find county-by-county and town-level data on the size and demographics of ALICE as well as the community conditions and costs faced by ALICE households, visit UnitedForALICE.org/Ohio.
 
When COVID-19 hit, more than 1.1 million Ohio 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 ALICE Report, released by United Ways of Ohio, in partnership with United For ALICE.

ALICE stands for Asset Limited, Income Constrained, Employed. In 2018, of Ohio’s 4.7 million households, more than 1.1 million were ALICE – a record number that were unable to afford the basics for survival, despite working. That’s in addition to the 646,948 families that were in poverty. Notably, many workers classified as essential during the COVID-19 pandemic – from grocery store employees to first responders – fall into the ALICE population, making them especially vulnerable to the economic effects of the crisis.

Over the last decade, Ohio’s low-income families systematically lost buying power and financial stability as the high cost of essentials outpaced wages. 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 39% of Ohio’s households in 2018, up from 31% in 2007. In contrast, poverty levels remained largely flat at about 14%. The report shows ALICE households were locked out of economic growth and unable to establish savings due to meager pay raises and inconsistent job hours, schedules, and benefits.

“COVID-19 has taken a toll on everyone in our community, but the Ohioans highlighted by this report are among those paying the highest price during this crisis,” said Jim Mullen, president and CEO of United Way of Summit & Medina. “ALICE families are facing the great health and financial risks. They are the workers who don’t have health insurance, have no paid sick days, whose children receive daily meals at school, and whose jobs have helped our community throughout this pandemic.”

The ALICE Report for Ohio is a project of United For ALICE, a grassroots movement of some 650 United Ways in 21 states, corporations and foundations, all using the same methodology to document financial need. ALICE Reports provide county-by-county and town-level data, and analysis of how many households are struggling, including the obstacles ALICE households face on the road to financial independence.

“ALICE in Ohio: A Financial Hardship Study” shows that in 2018, the cost of survival ranged annually from $21,828 for a single adult, to $24,396 for a senior citizen and $67,404 for a family of four with an infant and a preschooler. Putting this in perspective, the median hourly wage for food preparation and serving workers, the most common occupation in Ohio, was $9.31, or $18,620 per year – less than all the budgets.

This 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 $16.85 an hour in order to afford the Household Survival Budget for a family of four. That’s up from a wage of $12.93 an hour affording that budget in 2007. During the same period, the number of low-wage jobs grew by 5%, accounting for 35% of all jobs in Ohio in 2018.

“The ALICE Essentials Index shows that, through no fault of their own, ALICE families have been priced out of economic stability, setting the stage for the scope of this crisis,” said United For ALICE National Director Stephanie Hoopes, Ph.D. “Using the Consumer Price Index alone to measure inflation provides an incomplete picture of the cost of living, severely underestimating the mounting financial pressures on ALICE families.”

Mullen said the report’s findings should serve as a rallying cry for communities to remove obstacles to financial stability, identify gaps in community resources and build data-driven solutions to help ALICE families achieve economic stability, especially in light of the coronavirus crisis.

Since March, United Way of Summit & Medina has expanded access to basic needs support through 211, as well as financial coaching through the Financial Empowerment Center. The organization is working with the County of Summit to administer over $6 million in CARES Act funding for rent and mortgage assistance. And going forward, United Way plans to bring wraparound services into more neighborhoods through its Family Resource Centers in Akron Public Schools.

“We have depended on them throughout this pandemic to staff our grocery stores and pharmacies and to answer our emergency calls. But for the last 10 years, no matter how hard ALICE families worked, the gap between their wages and the cost of basics just kept widening,” said Mullen. “We owe it to them to make sure they have what they need to weather this crisis. The economic future of our community depends on their success.”

For more information or to find data about ALICE in local communities, visit UnitedForALICE.org/Ohio.

SHARE