According to United Way of Florida’s 2020 ALICE (Asset Limited, Income Constrained, Employed) report, 46% of Florida’s households struggle to afford the basic necessities. Thirteen percent fall below the Federal Poverty Level, or FPL, and 33% live above the Federal Poverty Level, but below the “ALICE Threshold”—meaning that they earn too much to meet the legal threshold of poverty, but still cannot realistically make ends meet. Because the Federal Poverty Level is not often adjusted to keep up with inflation, the ALICE Threshold captures a more complete picture of the unmet financial needs of Floridians.
ALICE households are determined by the ALICE Household Survival Budget, a county-specific estimate of the minimal cost of living. It includes housing, food, transportation, health care, childcare, taxes, a modest phone bill, and a small “contingency fund” equal to 10% of the total budget. Incidentals like emergency repairs, Internet and cable, or holiday gifts are not figured into the ALICE Household Survival Budget. In addition to their report, The United Way also released a report on its methodology, detailing how it collects data and determines the budget thresholds referenced in the ALICE Report.
For the first time, the 2020 ALICE Report includes a data tool to measure the change in cost of essential goods and services used to determine the ALICE Household Survival Budget: the ALICE Essentials Index. According to the index, the cost of living is rising at a greater rate than the official rate of inflation. Between 2007 and 2018, the cost of essentials increased by an average rate of 3.4% each year nationwide, while the inflation rate rose by only 1.8%. The report also found that the ALICE Essentials Index trended higher in urban areas due to increased population, making rent difficult to afford, especially for seniors and millennials. The report predicts that the percentage of households that spend more than 50% of their income on rent will increase by at least 11% by 2025.
However, it isn’t just the cost of living that has increased over time. Although the poverty rate in Florida has remained somewhat stagnant, Florida’s ALICE households have increased from 22% in 2007 to 33% in 2018. This could be related in part to a shift toward hourly pay in Florida. Although unemployment was low in 2018, 50% of workers in Florida were paid by the hour, rather than receiving an annual salary. Additionally, 65% of the jobs in Florida paid under $20 per hour.
In part, this is due to an expansion of the “gig economy”— 48% of millennials reported that they work a side gig in addition to their primary job — and the growth of lower-wage business sectors, like hospitality and food service. Despite having one of the largest populations of food-service employees, Florida ranks among the lowest in their average annual wages. And while the health care industry in Florida continues to grow, the majority of jobs added to the market have been low-wage. Even in the age of automation, the report predicts that this trend will continue with two-thirds of the state’s fastest-growing occupations paying under $15 per hour.
When broken down by demographic, certain population groups were far more likely to live below the ALICE Threshold than others. Households headed by single women were the most likely to live below the ALICE Threshold, at a rate of 78%. Households headed by people under the age of 25 had the next highest rate of 75%. Meanwhile, 63% of Black and 56% of Hispanic-led households also lived below the ALICE Threshold in 2018.
The situation has gotten worse for these demographics over the years. While White households saw a 2% decrease of those living below the ALICE Threshold, all other demographics saw an increase, with Hispanic and Asian households experiencing respective rate increases of 26% and 29%. However, the report notes that some of these increases may be attributed to the growing diversity of Florida’s population. During the same period of time between 2010 and 2018, the number of White households only increased by 3% while Hispanic households increased by 30% and Asian households increased by 24%. Black households saw a 13% increase in both the number of households living beneath the ALICE Threshold and the number of households overall.
The United Way of Florida makes a compelling case to reduce the number of households living below the ALICE Threshold. The new report identifies key targets for improvement and suggestions on how Florida can help more households rise above the ALICE Threshold. One suggestion involves the implementation of mobile library services. The ALICE report identified several areas in Florida that experience higher-than-average ALICE rates and do not have a library that is easily accessible to low-income households. By introducing a mobile library service, people without access to transportation or Internet are better able to apply for jobs, check emails, and apply for various forms of government assistance. Another recommendation is for local governments to map out their flood zones and their concentrated areas of poverty in order to better prioritize disaster relief funds and services to those with the greatest need. By focusing on key areas and maximizing the financial growth of households that fall below the ALICE Threshold, The United Way of Florida believes the state can enjoy increased tax revenue, lower crime rates, and the lower utilization of social services.
The Florida ALICE 2020 report utilizes 2018 data, the most recent available. To view the report and to access detailed county-by-county data, visit The United Way of Florida.
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