Skagit County Trends Newsletter

ALICE POVERTY MEASUREMENT - DIFFERENT THAN THE FEDERAL POVERTY LEVEL -

Debra Lancaster photo
Lancaster
Bill Henkel photo
Henkel

When considering poverty measurements, most people are most familiar with the Federal Poverty Level (FPL), if only by name. Created in the early 1960's, the FPL annually calculates national income thresholds based on family makeup and not varying by geography. Over time, many have come to view the FPL as an inadequate means of determining the number of U.S. households facing severe financial hardship.

A new indicator on the Trends site, ALICE Household Survival Budget for a Family of Four, is a poverty measurement produced by the United Way that seeks to address the FPL's shortcomings. ALICE, or Asset Limited Income Restrained Employed, explicitly recognizes categories beyond shelter and food, such as transportation, communications, health care, and importantly, childcare that do vary across geographical locations across the U.S. These variations and these categories, not considered in the FPL, provide a more precise measurement of the income required to live in a particular area. Savings are not a part of the survival budget.

According to the official ALICE website, "ALICE is a hardworking member of the community who is employed yet does not earn enough to afford the basic necessities of life." More specifically, "ALICE earns above the federal poverty level, but does not earn enough to afford a bare-bones household budget of housing, child care, food, transportation, and health care." Furthermore, the official poverty level "is so understated that many government and nonprofit agencies


use multiples of the FPL to determine eligibility for assistance programs."

Debra Lancaster, Executive Director, United Way of Skagit County, says "The ALICE Report reveals a way to better understand the households who are financially struggling and are at risk of losing everything when something bad happens, such as becoming ill without having sick time or having a car break down."

Lancaster would like to see a community conversation begin around the ALICE measurement. She wants policy makers "to be aware and understand that ALICE families are working households; they hold jobs, pay taxes, and provide services vital to our economy…low-wage jobs that most of the County depends on in our everyday lives. When combined with the families living at or below Federal Poverty standards, we are talking about 1/3 of our residents."

Bill Henkel, Executive Director of Community Action of Skagit County, says, "The basic problem with FPL, whose calculations were rooted in the 1960s, is that it seriously under-counts the need today".

"Here's the reality for us: each year Community Action sees about twice the number of people coming through our doors than the Federal Poverty Level would suggest", said Henkel.

Henkel says, "The FPL applies to 12.5% Skagit County residents, but we see about 25% Skagitonians, or one in four. Coincidentally, if you look at your calculations of income, ALICE's estimate is just over twice that of FPL. Thus, that estimate (and the flow through our doors) seems to strongly suggest the true level of need - of hurt - in our community."

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