World Economy

Forty-Three Percent of Americans Close to Poverty

California, New Mexico and Hawaii have the largest  share of struggling families, at 49% each. California, New Mexico and Hawaii have the largest  share of struggling families, at 49% each.

The economy may be chugging along, but many Americans are still struggling to afford a basic middle class life.

Nearly 51 million households don’t earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone, according to a study released Thursday by the United Way ALICE Project. That’s 43% of households in the United States, CNN reported.

The figure includes the 16.1 million households living in poverty, as well as the 34.7 million families that the United Way has dubbed ALICE—Asset Limited, Income Constrained, Employed. This group makes less than what’s needed “to survive in the modern economy”.

“Despite seemingly positive economic signs, the ALICE data shows that financial hardship is still a pervasive problem,” said Stephanie Hoopes, the project’s director.

California, New Mexico and Hawaii have the largest share of struggling families, at 49% each. North Dakota has the lowest at 32%.

Many of these folks are the nation’s child care workers, home health aides, office assistants and store clerks, who work low-paying jobs and have little savings, the study noted. Some 66% of jobs in the US pay less than $20 an hour.

The study also drilled down to the county level. For instance, in Seattle’s King County, the annual household survival budget for a family of four (including one infant and one preschooler) in 2016 was nearly $85,000. This would require an hourly wage of $42.46. But in Washington State, only 14% of jobs pay more than $40 an hour.

Seattle’s City Council just passed a controversial tax on big businesses to help alleviate the city’s growing homelessness and affordable housing problems.

“What we found in the numbers is that the bare minimum cost of living, what we call the ‘household survival budget’, has continued to increase since 2010, while wages have stayed relatively flat,” Hoopes told Observer. “It’s a good reminder that the good economic news is not reaching all families.”

Surprisingly, United Way is the first research organization to calculate the minimal cost of living, a number easily masked by broader economic indicators such as the consumer price index. “It’s important to make the distinction between the bare-bone, minimal household necessities and the big basket of items used for CPI calculation,” Hoopes said.

Like most census-based studies, distribution of economic measures is uneven across geographies. North Dakota (32%) and South Dakota (33%) have the lowest “middle range” population, while New Mexico, Hawaii and California claim the top ranks at 49%.

Even within the same state, the number varies greatly from county to county. In New York, for example, 47% of households can’t afford a budget of basic necessities, but county-level percentages range from 28% to 75%.


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