A decrease in poverty level can hurt struggling families
When I read a headline about the “good news” of slight decreases in poverty levels, I might be the only one in a crowd to feel discouraged — not encouraged. While we are grateful to see any small improvement, the picture of what it means to be a struggling family in Central Florida is not accurately painted when using the Federal Poverty Level (FPL) to measure it. From more than 20 years in the field with United Way, I have learned that a decrease in poverty levels can translate to a devastating reality for many families.
One of the most frequently used tools to measure need in our country is the Federal Poverty Level. However, in reality, there is a large percentage of our population who is living above poverty but is far from being financially stable.
These are hardworking families who are known as ALICE — Asset Limited, Income Constrained and Employed. ALICE is employed, sometimes working multiple jobs to make ends meet, but does not earn enough to save for an emergency, putting them one unexpected bill away from financial ruin.
In Central Florida, approximately 14% of the population lives below the Federal Poverty Level. On top of that, an additional 33% of the population are ALICE, struggling financially. By only evaluating need based on those “in poverty” negates the challenges that one out of three Central Florida residents face.
Despite the FPL’s benefit of providing a nationally recognized income threshold for determining those eligible for certain health programs and federal assistance, its shortcomings are well-documented. It is not based on the current cost of basic household necessities and, except for Alaska and Hawaii, it is not adjusted to reflect the cost of living differences across the U.S.
The United Way ALICE Report, however, examines the minimum cost of living, or a survival budget, based on housing, childcare, food, transportation, health care, and necessary technology needs at the county level to more accurately identify what it costs to survive.
In addition to the FPL not being an accurate measure of need, a real-life impact of rising above the poverty level may include no longer qualifying for needed support programs. Imagine your family of four suddenly goes from making $23,000 annually to $25,000. Reason to celebrate, right? Wrong. Your family no longer qualifies for some public assistance programs, thus actually increasing your household expenses. This phenomenon, known as the “fiscal cliff,” demonstrates the momentous leap it takes to break out of poverty.
Although decreasing poverty levels in our community are not something to overlook, it’s important to acknowledge the reality of what nearly 350,000 households are now facing in Central Florida. They are not necessarily “in poverty,” but they are still struggling, feverishly treading financial water, trying to stay afloat. They are ALICE.
The reality behind statistics is usually not as simple as a headline can make it seem. Consider the real-life implications of how we might improve conditions for those in poverty, as well as the struggling ALICE population.