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The Consequences of Insufficient Household Income

This new Consequences of Insufficient Household Income report provides a deeper level of understanding of the choices that ALICE and poverty-level families across the country make when they do not have enough income or assistance to afford basic necessities, and the consequences of those choices.

Figure 2. Percent

Figure 2. Percent of Households Below the ALICE Threshold Based on Wages and Household Survival Budget, 2014 State Total Households Households Below ALICE Threshold Household Survival Budget Single Adult Family of Four Percent of Jobs Paying Less Than $20/Hr Federal Poverty Level $11,670 $23,850 Connecticut 1,355,817 38% $22,656 $70,788 49% Florida 7,328,403 43% $17,700 $48,012 69% Iowa 1,242,859 31% $16,932 $46,680 68% Idaho 594,276 39% $17,808 $47,676 71% Indiana 2,497,198 36% $17,400 $47,952 68% Louisiana 1,718,876 42% $16,812 $46,236 68% Maryland 2,166,102 35% $23,568 $61,224 53% Michigan 3,835,841 41% $17,916 $54,564 62% New Jersey 3,194,844 37% $24,300 $64,176 52% New York 7,289,792 44% $21,540 $62,472 55% Ohio 4,595,301 41% $21,948 $58,224 64% Oregon 1,536,797 39% $18,996 $53,328 62% Virginia 3,081,325 39% $22,212 $60,876 58% Washington 2,678,337 32% $17,592 $53,700 55% Wisconsin 2,305,663 42% $23,196 $54,804 65% 15 States 45,425,396 (39% of U.S. HHs) 40% (average) $20,038 (average) $55,381 (average) 61% (average) Source: American Community Survey, 2014, and the ALICE Threshold, 2014; U.S. Department of Housing and Urban Development (HUD), 2014a; U.S. Department of Agriculture (USDA), 2014; Bureau of Labor Statistics (BLS), 2014; Internal Revenue Service (IRS), 2014; Bureau of Labor Statistics, Occupational Employment Statistics (OES) Wage Survey – All Industries Combined, 2014; and state treasuries and state child care agencies, 2014 This Consequences of Insufficient Household Income report explores how ALICE and poverty-level families manage when they do not have enough income or assistance to afford basic necessities. Strategies reported here are those that families are currently employing across the U.S. in order to survive. The larger the gap between income and costs, the more extreme the strategies, and the greater the risks to a family’s immediate health and safety. These strategies have consequences for a family’s employment, for where they live, for what they eat, and for how their children fare in school. In addition, these choices affect many beyond the immediate family, including all who live, work, volunteer, and go to school in the same community, in terms of reducing economic productivity, stressing local health care and education systems, and raising insurance premiums and taxes for everyone. This report covers the choices that families make in each of the five essential areas of a household budget – housing, child care and education, food, transportation, and health care – as well as the role of taxes in financial decision making. There is no evaluation of the efficacy of these choices; all are sub-optimal. Rather, the report outlines the consequences of each choice, for the family and then for the broader community. 6 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME

The purpose of this report is to present extensive research in each subject area, but just as crucially, to highlight how choices in one area invariably affect choices in others. For this reason, the report is meant to be read as a whole. With this clear documentation of the issues and of how they are interconnected, community stakeholders can start to build solutions for their neighborhoods, towns and cities, counties, and states. This report is meant to inform a variety of policy solutions that can improve the lives of ALICE families in every state. The United Way ALICE Reports are a trusted resource for United Ways across the country; the ALICE data is available to policymakers, government employees, nonprofits, academics, and community organizations. This report is meant to provide a nonpartisan overview of a set of serious problems. The challenges ALICE families face are not liberal or conservative, Democratic, Republican, or Independent issues. Their hardship requires attention and solutions from all corners of the policy domain. We are all better off when ALICE has better choices. GLOSSARY OF ICONS The choices ALICE families make in one budget area often have consequences in others. Throughout this report, we map these interconnections with the following icons: HOUSING Renters and Owners FOOD Quantity and Quality HEALTH CARE Primary/Specialty/Emergency Care CHILD CARE AND EDUCATION Preschool to Higher Education TRANSPORTATION Vehicles and Public Transit TAXES Federal and State INCOME AND SAVINGS Consequences of Low Income That Make it Even Harder to Work, Earn, and Save More UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME 7

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