EDITORIAL: ALICE needs a helping hand, not a handout


AP Photo/Mark Duncan

THE Rapppahannock United Way’s latest report on ALICE (Asset Limited, Income Constrained, Employed) residents confirms that there are 115,884 households in the greater Fredericksburg region living on the financial edge, with most unable to come up with even $400 to cover an unexpected expense.

Despite barely making enough to cover the basic costs of living, many of these workers are not eligible for government assistance—which falls off sharply in what is known as the “benefits cliff”—leaving them vulnerable to whatever large or small misfortune comes their way. And those who do qualify for assistance often find themselves in a Catch-22 position, in which accepting a slightly better paying job or a raise from their current employer costs them more in lost benefits than it’s worth.

Sarah Walsh, Rappahannock United Way’s vice president for strategic initiatives, told The Free Lance–Star that the nonprofit has met with officials at the Virginia Department of Social Services and asked them to consider replacing federal poverty level guidelines with ALICE data that more accurately takes into account the high cost of living in our area, and possibly phasing-out income-related subsidies in a more gradual fashion that incentivizes low-wage earners to better themselves instead of punishing them for trying to get ahead.

This is an excellent idea. The working poor are not free-loaders; they are contributing members of society, but their incomes have not kept pace with the staggering rise in the cost of living in Virginia. According to the ALICE report, health care costs in Virginia alone rose 81 percent between 2007 and 2015 despite then-candidate Barack Obama’s promise, at a 2008 town hall in Bristol, that if elected president he would “lower premiums by up to $2,500 for a typical family per year.”

During that same period, taxes increased 35 percent and housing costs went up 27 percent in the commonwealth, yet very few Virginians saw their incomes increase even close to those percentages.

In the City of Fredericksburg, 39 percent of city residents fall into the ALICE category. According to the report, it costs $80,088 (or an hourly full-time wage of $40.04) for a typical family of four—two adults with an infant and a preschooler—to afford the basic necessities of life in the city, where the median household income is $51,762.

In Spotsylvania County, 41 percent of the population is ALICE, with an annual income below the $75,720 deemed necessary to adequately feed, clothe, and shelter a family of four. In Stafford, where a bare-bones household budget that does not allow for extras (including savings) is $81,288 for a family of four, ALICE households make up 35 percent of the population.

It’s interesting to note that in all three of these jurisdictions, taxes are the third largest expense after housing and child care. So every time elected officials raise taxes—which they all just did—they make it even harder for ALICE families to make ends meet.

Virginians already receive $12.2 billion in public and private subsidies, and taxpayers—many of whom are also ALICE—should not be expected to supplement the incomes of households at the higher end of the income scale.

Public concern should be focused instead on working households whose annual income is just slightly above the federal poverty level of $24,250 for a family of four. They’re generally out of luck as far as government assistance is concerned, even though it would cost taxpayers much less in the long run to help them stay afloat than add them to the welfare rolls.

Flattening and gradually reducing the benefits cliff would help. So would providing small sums to cover unexpected emergencies—such as a car repair or a medical crisis that threatens their continued employment.

Local employers who depend upon, and profit from, ALICE workers also need to step up their support by raising their pay and offering them more benefits, if possible, or by at least providing more non-monetary assistance, such as flexible hours that reduce their child care expenses. When you’re living paycheck to paycheck, every little bit helps.

But Walsh admitted that just giving handouts, especially to people who keep making the same bad financial decisions over and over again, is not the solution either. That’s why helping low-income workers keep their jobs so they can move up the economic ladder and build family wealth should be the ultimate goal of any public or private subsidies.

Source: https://www.fredericksburg.com/opinion/editorial-alice-needs-a-helping-hand-not-a-handout/article_af9ae45e-fa2c-5d48-97fe-a6ee26cca466.html

Asset Limited, Income Constrained, Employed

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