A third of Mississippians can’t afford basic household necessities but fail to meet the federal definition of poverty, a new United Way report finds.
The report, released in August, measures the number of households that earn above the federal poverty level (FPL) but are still struggling to make ends meet. This is a group the report refers to as ALICE — asset limited, income constrained, employed.
The report was presented to the Senate Labor Committee last week during their two-day hearings on raising the minimum wage, which is currently set at the federal rate of $7.25 an hour.
“Everyone knows ALICE,” said Michele Connelly, executive director of the United Way of West Central Mississippi and co-chair of the Mississippi ALICE Project. “If you haven’t been ALICE, you very much know ALICE and interact with ALICE every day.”
The report found 1 in 2 Mississippians experience financial constraints, though only 19% live below the federal poverty level (neighboring states Arkansas, Louisiana, and Tennessee fall between 15-18% on this metric). The report attributes this gap to the outdated nature of the FPL; the authors instead use a metric they developed, the basic household survival budget, which accounts for modern necessities like smartphones and is adjusted geographically based on local costs.
The basic household survival budget accounts for housing, child care, food, transportation, healthcare, technology, miscellaneous expenses, and taxes at the least expensive rates. An annual salary of $21,924 would cover these basic costs for a single individual, $55,980 for a family of four.
Connelly specifically pointed to the oversized impact on single mothers — 83% of families headed by single mothers fall below the ALICE threshold.
“So many single mothers cannot make ends meet, and that is wrong,” Connelly told Mississippi Today. “I’m a strong believer that we need to make childcare accessible to ensure that women can do what we need to do to go out and support our families.”
Connelly also pointed out that many of the professions which fall below the ALICE threshold are the essential workers who have been keeping our economy running during the pandemic, but as the report shows, cannot provide for themselves.
Lead Researcher Stephanie Hoopes identified the state’s low workforce participation rate, 56% before the pandemic, as a barrier to employers voluntarily raising wages. With so many people out of the workforce, these individuals act as a reserve of potential workers that enable employers to offer non-competitive salaries.
“The strength of the state economy is tied to the financial security of its residents,” Hoopes said in the Senate hearing.
Advocates have a lot of ideas about how to improve conditions for ALICEs — down payment assistance, laws against discriminatory lending practices, and payday lending regulations, but Sara Miller, a member of the report’s research advisory committee and analyst at the Hope Policy Institute, said that she thinks the most pressing issue for ALICE families is the looming eviction crisis.
“Evictions have long-term consequences, damaging credit scores and making it harder to get housing… In addition to what we hope will be the swift deployment of rental assistance funds, state and local governments can enact local eviction moratoriums to give that money time to get out,” Miller told Mississippi Today.
READ MORE: With federal eviction moratorium ending, Mississippi has spent 6.2% of federal rental assistance funds
Cassandra Welchlin, lead organizer of the Mississippi Black Women’s Roundtable, specifically cited the need for two Mississippi policy changes: Medicaid expansion and an equal pay bill. Through her work, she has met the women who are the breadwinners of many ALICE families and found that they often fall in the coverage gap. Expanding Medicaid would allow these households to allocate their limited resources to other necessities, she said.
“Mississippi can do better,” Welchlin said. “Just as there were policies that were created that made these households ALICE, we can create policies to give these households solutions.”