COVID-19 Hit as Record Number of ALICE Families Struggled to Afford Household Essentials

Harrisburg, PA - Before COVID-19 hit, almost 1.4 million Pennsylvania households were already one emergency away from financial ruin — a 10-year record high — setting the stage for the unprecedented economic impact of the crisis, according to the latest ALICE® Report, released today by United Way of Pennsylvania. ALICE, which stands for Asset Limited, Income Constrained, Employed, is an initiative of the Pennsylvania network of United Ways to raise awareness of the challenges faced by working families and to mobilize organizations and individuals who want to support strategies and policies that support ALICE along their journey to financial stability.
 
“Some workers from families we call ALICE have been the heroes of this pandemic, keeping grocery stores stocked, taking care of children at child care, or providing home health aide support for the elderly or people with disabilities,” said Kristen Rotz, President of United Way of Pennsylvania. “Other ALICE workers in the restaurant and hospitality industry experienced the emergency that tipped the household budget from just scraping by to being unable to pay their bills.”
 
The updated data within ALICE in Pennsylvania: A Financial Hardship Study show that over the last decade, Pennsylvania’s low- and middle- income working families lost buying power as increases to the costs of essentials, such as housing and healthcare, outpaced wage increases. This caused the number of ALICE households to rise a substantial 35 percent between 2007 and 2018. The number of ALICE households grew to account for 27 percent of Pennsylvania households in 2018, which is up from 21 percent in 2007. The number of impoverished households remained largely flat at about 13 percent of PA’s total households.
 
The statewide average annual cost of survival in 2018 ranged from $23,544 for a single adult, to $26,436 for a senior citizen and $69,648 for a family of four with an infant and a preschooler. The median hourly wage for a retail salesperson, the most common occupation in Pennsylvania in 2018, was $11.08, or $22,160 per year.
 
“No matter how hard ALICE families worked over the last decade, the gap between their wages and the cost of basics kept widening. These already fragile ALICE households are now facing an even deeper financial hole due to COVID-19,” Rotz said.   
 
United Way also conducted a statewide survey about the economic impacts of COVID-19 in August 2020 which found that ALICE households were more concerned about how to afford housing and related costs like utilities than they were about contracting COVID-19. ALICE households only had one month or less of savings to cover necessities, versus the rest of PA households who had two months or more.
 
“This data drives United Way’s policy priorities for a very important legislative session where our elected representatives’ decisions need to support recovery from the pandemic. The health and financial stability of ALICE workers and consumers has a multiplier effect which benefits local businesses, and our top priority is for Pennsylvania to join 30 other states that already have an Earned Income Tax Credit which will put earnings back in the pocket of working Pennsylvanians to help pay for things they need,” Rotz said.
 
United Way will also be advocating for rental and utility assistance to help families who are months behind on their bills, for state partnership and investment in PA 211 to continue to connect people in need to resources in their communities, and for increased access to high quality infant and toddler care which will be necessary to help ALICE families return to work.
 
The full report, plus an executive summary of COVID-19 impacts, an interactive map, the ALICE  experience, and more are available at www.uwp.org/alice.