The Consequences of Insufficient Household Income

Low-paid child care workers are ALICE. The average wage for child care workers is approximately $10 per
hour ($20,000 annually if full time) – so low that nearly half of child care workers receive public assistance.
A recent report released jointly by the U.S. Department of Health and Human Services and the U.S.
Department of Education makes clear that low compensation undermines child care quality. The quality of
any early learning setting is directly related to the quality of its staff. If pay is too low, workers are susceptible
to tardiness, absences, and stress from their own living situations. In addition, there is no incentive for
workers to obtain specialty training (Ludden, 2016; U.S. Department of Health and Human Services and U.S.
Department of Education, 2016).
Trends in Education
ALICE households have few means to change the educational trajectory that places low-income students in
poorer quality schools and increases their risk for not graduating high school or not attending or completing
college. There have been several national attempts at education reform in recent decades, with mixed
results.
The role of charter schools is increasing. One response to the persistence of the achievement gap and
the perception that public schools are not meeting the needs of many students has been the creation of
charter schools. Charter schools are publicly funded but run by independent nonprofit boards; management
can be either nonprofit or for-profit, but currently there are very few for-profit operators. The ability of charter
schools to improve school performance and close the achievement gap for students of color and those from
low-income families is the subject of nationwide debate.
Since 2000, charter school enrollment has increased from 0.3 million to 2.3 million nationwide, with 4.6
percent of public school students attending a charter school. The efficacy of charter schools varies greatly
from school to school and state to state. According to a 2015 Center for Research on Education Outcomes
study, urban charter schools have been especially effective for students in poverty, who gain the equivalent
of 40 days of additional learning per year in math and 28 additional days in reading compared to traditional
public school students (CREDO, 2015).
Earning potential will continue to be tied to education – and specifically to college majors. For
students who do attend and graduate from college, there is a wide disparity in employment and earnings
based on their major. Degree majors that provide technical training (such as engineering, math, or computer
science), or majors that are geared toward growing parts of the economy (such as education and health)
have done relatively well. At the other end of the spectrum, those with majors that provide less technical and
more general training, such as leisure and hospitality, communications, the liberal arts, and even the social
sciences and business, have not tended to fare particularly well in recent years. This has led to a relatively
new phenomenon of well-educated households not being able to afford basic necessities. For example,
the median annual salaries of college-educated workers age 25 to 59 years old range from $39,000 for an
early childhood educator to $136,000 for a petroleum engineer (PayScale, 2014; Abel, Deitz, & Su, 2014;
Carnevale, Cheah, & Hanson, 2015).
38 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME