A new report funded by Entergy Arkansas and the Winthrop Rockefeller Foundation indicates that 41% of Arkansas households are either below the federal poverty level or have incomes that struggle to afford housing, childcare, food, transportation and healthcare.
The report addresses “ALICE” households – those that are “Asset Limited, Income Constrained, and Employed.” While the federal poverty line for a family of four sits at $24,600, ALICE households are between that amount and $46,812.
“When two out of five households in the state can’t make ends meet, the system is broken,“ said Sherece West-Scantlebury, CEO of Winthrop Rockefeller Foundation. “Working harder – when ALICE is already working two or three jobs – won’t fix it and only diverts attention away from the kinds of decisions and policies required to make good on the American Dream promise.”
ALICE households include teachers, childcare providers, health aides, dental hygienists, mechanics and store clerks, according to the report’s authors.
“The ALICE report highlights the hardships for families whose income puts them above the limit for public assistance but struggle with the cost of child care, health care, and the children’s extra expenses,” said Gov. Asa Hutchinson. “This report emphasizes the need to continue our effort to create high-wage jobs and the importance of Arkansas Works health coverage for struggling families.”
Based on the federal poverty line, 17% of Arkansas households lived in poverty in 2017 and another 24% were ALICE households. That’s a combined 41%, or 473,955 households, with income below the ALICE threshold in 2017.
Results of the report show that the total number of Arkansas households that cannot afford basic needs increased 20% between 2007 and 2017. During that same time, the cost of basic household necessities in Arkansas increased by 32%, far more than the increases in overall inflation and wages.
The report is a project of United For ALICE, a grassroots movement of some 600 United Ways in 21 states, corporations and foundations, all using the same methodology to document financial need. For ALICE households, a basic setback — like a car repair or even a minor illness — has the potential to escalate and leave a family vulnerable and spiraling, according to the data.
“At Entergy, we recognize that many hardworking people can’t make ends meet or afford basic needs — including electricity. We support ALICE in Arkansas and this report that helps shine a light on the large number of households struggling and why,” said Laura Landreaux, president and CEO of Entergy Arkansas. “We invest millions in our communities to help improve the quality of life for customers. We believe that we can only be as strong as the communities we serve.”
Across the state, the share of households earning below the ALICE threshold ranged from 26% in Benton County to 64% in Lee County. Other findings in the report include:
The average Household Survival Budget (a calculation created for the ALICE report) for an Arkansas family of four is $46,812 — significantly higher than the federally recognized family poverty level of $24,600. (The Single Household Survival Budget is $18,240, with the FDL set at $12,060.)
Low-wage jobs continue to dominate the landscape in Arkansas, with more than half (51%) of all jobs paying less than $15 per hour.
In the Household Survival Budget, child care represents an Arkansas family’s greatest expense, at a state average of $761 per month for two children.
ALICE lives in every county in Arkansas — urban, suburban, and rural — and includes women and men who are single, married, young and old. White households make up the largest demographic (69%) mirroring Arkansas’ majority-white population. But while there are fewer Black and Hispanic households, they are disproportionately likely to be ALICE.
“While there are some positive economic indicators in Arkansas, especially near all-time low unemployment, the ALICE measures reveal that these economic benefits are not reaching all households,” said Stephanie Hoopes, PhD, author of the report and national director of United For ALICE. “In Arkansas, as across the country, the wages in many jobs that ensure our economy runs smoothly are not keeping up with the basic cost of living.”
“We need smart decisions and policies that put working families first and benefit the entire state,” said West-Scantlebury. “If Arkansas households earned at least the ALICE survival budget, we’d have $8.4 billion more in taxable wages and $6.9 billion more in consumer spending. Not only is that more money back in your pocket, but it’s more revenue — $2.2 billion to be exact — to invest in small businesses, schools, hospitals, and public transportation.”
To view a copy of the report, visit here.