Williamsport, Pa. — According to a new report from the Lycoming County United Way, United Way of Pennsylvania, and research partner United for ALICE, recent wage growth is failing to keep up with inflation and other problems faced by Pennsylvania households.
The expiration of certain enhanced federal tax credits and price hikes for essential products were also cited as difficulties.
ALICE (Asset Limited, Income Constrained, Employed) refers to those earning above the federal poverty level, but less than what’s needed to survive in the current economy. ALICE workers can include childcare providers, home health aides, and cashiers — those working low-wage jobs with little or no savings and who are potentially only one emergency from poverty.
The most recent ALICE in the Crosscurrents report states that the number of Pennsylvania households struggling to afford basic necessities grew by nearly 73,000 from 2021 to 2022. As a result, a total of 2,151,647 households or 41% were living paycheck to paycheck. The calculation includes the almost 658,000 Pennsylvania households in poverty and another 1,517,647 defined as ALICE.
To view the latest information from “ALICE in the Crosscurrents: An Update on Financial Hardship in Pennsylvania,” visit the United for ALICE data page. A .pdf of the full report is available on the right sidebar of the webpage, or scroll through to browse the dashboard with infographics.
While wages have been increasing, so too are costs. For a family of four with an infant and a preschooler, the basic costs to live and work in Pennsylvania, excluding tax credits, rose from $65,796 in 2021 to $83,700 just a year later. Compounding the issue in 2022 was the loss of up to $15,000 in federal child tax credits and stimulus payments that this family had access to in 2021.
“Many working households experienced wage increases, but the rising costs of household essential needs, and the loss of federal tax credits that were enhanced during the pandemic, leaving Pennsylvania ALICE households with less to make ends meet, despite more take-home pay,” said United Way of Pennsylvania President Kristen Rotz. “While local United Ways in Pennsylvania build programs and partnerships that help support the economic mobility of ALICE households, our network also advocates for statewide policy solutions like the Working Families Tax Credit, making childcare more accessible by funding a recruitment and retention initiative for the child care workforce, and support for PA 211 which helps Pennsylvanians connect to community resources.”
“There is no doubt bigger paychecks helped, but inflation and the loss of pandemic support converged to keep ALICE trapped,” added Ron Frick, President of the Lycoming County United Way which serves Lycoming, Sullivan, and Tioga Counties. “This latest data is a reminder that while we have made some progress, our work is far from over and all of us know someone, maybe even ourselves, who is struggling to make ends meet.”
The findings in this one year are consistent with a more than a decade-long trend. Since the end of the Great Recession, despite some ups and downs, the number of ALICE households in Pennsylvania has been steadily growing with only a slight drop before the pandemic. From 2010 to 2022, the total number of households rose by 7%, families in poverty increased by 5% — and the number of ALICE households grew by 19%.
“The data is showing persistent and widespread financial hardship — a red flag that the current system isn’t working for ALICE,” said Stephanie Hoopes, Ph.D., United for ALICE National Director. “Current policy has not been enough to break down the barriers that trap ALICE households in financial hardship, from lack of access to housing and childcare that’s affordable to inadequate community support such as broadband internet.”
The Lycoming County United Way is currently collecting audio testimonials from ALICE individuals about the current financial situations that they face. Stories can be recorded at ALICEvoices.org.
