The federal poverty line doesn’t begin to tell the story of poverty

The federal poverty line (FPL) is used to determine eligibility for aid and social services and also provides an important benchmark to know how many Americans are struggling financially each year, and over time.

But, did you know that the FPL is based on a calculation that has not been updated since the 1960s?

The figure is based on food costs — the government identifies how much it should cost to feed a family of four for one year and then multiplies that number by three. The disconnect is that in today's economy, food expenses represent just one-tenth of the average household budget according to the US Bureau of Labor Statistics, not a third. Other costs — housing, health care, childcare and transportation — typically consume larger portions of a family's budget.

In 2012, United Way commissioned the ALICE report to get a more accurate picture of households that earn more than the FPL — currently $26,200 for a family of four or $12,760 for an individual – but less than what it costs to live and work in the modern economy.

ALICE stands for Asset Limited Income Constrained Employed and it calculates the actual costs of housing, food, childcare, healthcare, transportation and other necessities of daily life in various regions of the United States. Then, the report calculates the number of households with incomes that fall below this ALICE threshold. 
The results are staggering. The most recent ALICE report using data from 2018 shows that while 11% of Martin County households are living below the FPL, an additional 33% are living below the ALICE threshold – and this was before the pandemic.

United Way of Martin County and its research partner United for ALICE recently released a research brief focusing on children in financial hardship. The ALICE in Focus: Children brief features an interactive data dashboard that provides filters for regional and local geographies, age, race, disability status, living arrangements and household work status.

The study reveals the disproportionate rate of financial hardship among Martin County’s Black and Hispanic children – where 88% and 66% respectively -- lived in households that couldn’t afford the basics in 2019. The study also reveals that 100% of children living in limited English-speaking households are living below the ALICE threshold. Because ALICE households often earn too much to qualify for public assistance, the report finds that more than 6,600 at-risk children in Martin County didn’t access the Supplemental Nutrition Assistance Program or SNAP.

Having accurate, complete data is the foundation for developing meaningful services to address the needs of the ALICE population. However, there is no one-size-fits-all solution to the issue of financial hardship in our community. That’s why United Way of Martin County invests in local programs to improve the education, financial stability, and health of Martin County residents.

We are specific about these investment areas as they are the building blocks that everyone needs for a good quality of life, and they are the cornerstones of a strong, prosperous community.  Remove any one building block, and the other two topple.  Build them all up, and there is a strong foundation for individuals, families, businesses and the entire community. Please join United Way as we work to ensure no one in our community is left behind.
You can find a link to the ALICE in FOCUS: Children interactive data dashboard as well as the most recent ALICE report on our website at www.UnitedWayMartin.org/ALICE.