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The Journal Gazette

September 21, 2016 1:02 AM

ALICE offers reason for pause in recovery statistics

Cautious optimism

Our region and our state are finally starting to gain some ground again economically.

Median household income in Indiana increased 2.1 percent last year, to $50,532, according to U.S. Census data. Allen County, which has been lagging behind the state and national numbers, actually saw median household income go up 2.5 percent – faster than the state as a whole – to $49,754.

But Indiana’s median household income is still 9 percent below the national median, which grew by 3.8 percent to $55,775 in 2015. And the census data show our state as one of only eight where income inequality also increased.

Just as those encouraging census figures were being released, the Indiana Association of United Ways’ update of its ALICE report suggested many Hoosiers are still being left behind as the state continues its slow recovery from the Great Recession.

The theory behind the United Way study is that the traditional federal poverty benchmark offers an inadequate measure of what it costs to survive as a working family. Those living just above poverty standards are often still unable to afford some of the basics. ALICE – Asset Limited, Income Constrained, Employed – is designed to measure how working families are faring in real economic terms, measuring such costs of living as housing, child care, food, medicine and transportation against household income.

Using those costs as its guide, United Way’s survey found that although the official Hoosier poverty rate was 15.2 percent in 2014, more than twice that many Indiana households – 36 percent – were struggling to meet basic needs. In most metropolitan counties, those figures were even worse. In Allen County, the percentage of families that fell below the ALICE line increased from 35 percent to 39 percent – almost two in five local households.

The numbers place “a spotlight on hardworking, and yet struggling, residents who have little or no savings, and are one emergency from falling into poverty,” United Way said as it released its latest study.

Though ALICE offers a more realistic measure of hardship here, it’s important to note an apples-to-apples problem. The census figures released last week reflect changes during 2015; the ALICE percentages were for 2014. During that gap of time, there have been some changes for the better.

As longtime economic development expert John Stafford points out, this area’s recovery from the recession has been stronger than other areas because it was hit harder to begin with. More people are working, and the hardcore poverty rate has dropped a little.

If income disparity is growing, as the state census numbers and Index of Income Inequality for Allen County suggest, the “ALICE problem” may fester even as state or local household earnings increase overall. Of course we benefit from attracting new companies and creating more jobs, but those jobs must offer decent wages if households hovering on the edge of poverty are ever to gain real economic security. We simply can’t afford to leave those hardworking families behind.