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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.

FOOD insecure” (a term

FOOD insecure” (a term that describes hunger) at some point in 2015, including 17 percent of households with children. The U.S. Department of Agriculture (USDA) defines food insecurity as the lack of access, at times, to enough food for an active, healthy life for all household members and limited or uncertain availability of nutritionally adequate foods. This includes both households with low food security (lower quality, variety, and desirability of food) and those with very low food security (multiple instances of disrupted eating patterns and reduced food intake). Food insecurity is most widespread among the lowest income groups, and it is often a recurrent situation. USDA national data has found that on average, affected households were food insecure for seven months of the year. Chronic food insecurity leads to less healthy eating and increased stress, which both contribute to poor Food is the most basic of all needs. In a country with vast agricultural resources, it may seem surprising that any family faces hunger. Yet 13 percent of U.S. households were “food health (Coleman-Jensen, Rabbitt, Gregory, & Singh, 2016). STRATEGIES What do ALICE and poverty-level households do when they cannot afford the food they need? 1: Eat Less Food and Less Healthy Food 2: Seek Food Assistance 3: Forgo Other Essentials Having enough food is a basic challenge for ALICE and poverty-level households. The cost of food in the Household Survival Budget is based on the USDA’s Thrifty Food Plan, the most minimal of the agency’s four food plans. Yet the gap between how much ALICE families need for food and what they can afford to spend shows up clearly in Figure 7, which compares three different monthly food budgets for a family of four to the monthly salary of a full-time employee working as a packer. In the U.S., 693,170 ALICE workers packaged a wide variety of products and materials (including food) by hand at an average hourly wage of $11.08, or $22,160 annually (if full time, year-round) in 2014 (Bureau of Labor Statistics, 2014). This section presents the best research available on the hard choices that struggling families are making every day when they do not have enough money for food, and the consequences of those choices. These are not policy recommendations, but information and analysis that can help stakeholders create the most effective solutions for their communities. 40 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME

Figure 7. Monthly Food Costs and Percentage of an ALICE Income, 2014 Monthly Cost $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 31% of Income USDA Thrifty Food Plan (used in Household Survival Budget) 36% of Income 49% of Income One-third FPL CES Actual Packer $11.08/hour ($22,160 annual) Food Options ALICE Job (Monthly Wages) Source: U.S. Department of Agriculture, 2014; Bureau of Labor Statistics, 2014 and 2014a; and U.S. Department of Health and Human Services, 2014 • Both the ALICE Household Survival Budget and the federal Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) are based on the USDA’s Thrifty Food Plan, which allocated $568 per month for a family of four (two adults and two children under the age of five) in 2014 – almost one-third (31 percent) of a packer’s wages (U.S. Department of Agriculture, 2014). • The Federal Poverty Level (FPL) was originally developed using the rule that food accounts for onethird of the family budget. In 2014, one-third of the FPL for a family of four was $674 per month – more than one-third (36 percent) of a packer’s wages (Fisher, 1992; U.S. Department of Health and Human Services, 2014). • The Consumer Expenditure Survey (CES) estimate of what a family actually spends on food, both at home and away from home, is $901 per month – almost half (49 percent) of a packer’s wages (Bureau of Labor Statistics, 2014a). Strategy 1: Eat Less Food and Less Healthy Food When ALICE and poverty-level households do not have enough money for food, they not only reduce the amount of food they eat, but they eat fewer healthy foods, which are typically more expensive. According to a recent national survey from Feeding America, buying inexpensive, unhealthy food is the most commonly reported coping strategy for food insecure families (reported by 78.7 percent of respondents), followed by buying food that has passed its expiration date (56 percent) (Feeding America, 2014). UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME 41

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