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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.

Low-paid child care

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

UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME 39

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