Who’s Getting Walloped by the Economy? Go Ask ALICE

by Gregory Heires

(Photo Flickr/Eric Gravengaard)

(Photo Flickr/Eric Gravengaard)

 Occupy Wall Street struck a deep chord with its notion that the fundamental divide in our country is between the “1 percent” and the rest of us.

That facile rhetorical device brilliantly captured the sharpening of the gross economic inequality in the United States and how the economy is leaving so many of us behind.

But we all know—and OWS activists would be the first to acknowledge—that our social stratification is in fact more complicated than the 1 percent versus 99 percent division suggests, with cleavages not only within class lines but also differences among racial, ethnic and gender groups and based on immigrant status.

Occupy Wall Street focused attention on the young educated work force.

At the height of the OWS revolt, the media paid less attention to the working poor, a group that encompasses tens of millions of Americans who live above the federal poverty line but are only a paycheck away from economic calamity. They have little hope of seeing their living standards improve unless the federal government and state governments adopt more progressive economic policies, unions become stronger and more inclusive, and political pressure leads to higher wages. The retail workers movement has helped raised greater awareness of the working poor, and it is building on Occupy Wall Street’s success in moving the country’s political discourse to the left.

New Jersey’s Working Poor

Two studies by the United Way of Northern New Jersey use a novel term—ALICE—to describe the households of the working poor who live above the poverty line but earn too little for their basic necessities of housing, child care, food, health care and transportation. While specific to New Jersey, the reports speak to our nationwide problems of the lack of good jobs, an inadequate safety net, the retirement crisis and economic insecurity.

In New Jersey, the “household survival budget” is $58,500 for a family of four and $25,368 for a single adult, according to the latest United Way of Northern New Jersey study, “‘ALICE—Asset Limited, Income Constrained, Employed’: A Study of Financial Hardship in New Jersey.”

The ALICE group includes 769,900 households in New Jersey. When you add the 10 percent of the households that are below the poverty line—312,762 people—that means more than a third of the state’s population—34 percent–eke out an economically unstable existence.

ALICE households cut across every age bracket and demographic group in New Jersey:

• Seniors make up the largest segment (23 percent). So, while Social Security has lowered the number of seniors who live in poverty, it still does not provide for self-sufficiency. Twenty percent of the seniors worked in 2010, an increase from 17 percent before the Great Recession hit in 2008.

• Families with children make up nearly a quarter of ALICE households.

• Other groups include couples without children, single households, immigrants, non-married adults and households with people with disabilities.

ALICE workers are employed in low-paying jobs, have few or no assets and lack sufficient savings to guard against sudden income loss or major emergency expenses. Twenty six percent of households in New Jersey are regarded as “asset poor,” which means they don’t have the net worth to live at the poverty level for three months if they suffer a loss of income.

More than half the jobs in New Jersey pay less than $20 an hour ($40,000 annually for a full-time job). These occupations include cashiers; food preparation workers; school bus drivers; hairdressers, hairstylists and cosmetologists; teacher assistants; janitors, nursing aides; landscaping and grounds keeping workers; child-care workers; health-care workers; bank tellers; insurance clerks; teaching assistants, and security guards.

The Collapsing Economic Floor

Nationally, Alice households include those whose who have incomes that fall below the median household income of $51,017, as measured by the U.S. Census Bureau, but live above the poverty line. Many of them have high school degrees and some college education.

Andrei Cherny, president and co-founder of Democracy: A Journal of Ideas and chief executive of Aspiration Investments, points out that ALICE households have been particularly hard-hit by the widening income gap over the past century and its resulting decline in living standards. They are slipping out of the middle class.

In an op-ed article in The Washington Post in October, Cherney wrote, “This is the story of the United States in recent years: the rich have gotten richer, the poor have gotten poorer, the middle class has treaded water, and the floor has dropped out from under the ALICE class.”

If any improvement exists in the economy, they haven’t experienced it.

Writes Cherney:  “They were trampled in the Bush years; they are still waiting for an upturn during the Obama years. They are up for grabs, looking for leaders who will rebuild what once was a single, surging American middle class.”

With so many millions of Americans caught in the vice of poverty and low-wage jobs, it is absurd that the politics of austerity continues to have any legitimacy whatsoever in our political discourse. Raising the minimum wage; ensuring that Obamacare works for the millions without health care; supporting government programs through a federal transactions tax on Wall Street; expanding Social Security; creating government-backed jobs programs and reviving trade unionism are key steps needed to restore our dwindling and economically-squeezed middle class.

Gregory N. Heires is senior associate editor at Public Employee Press, the official publication of District Council 37, which represents 120,000 municipal workers and 50,000 retirees in New York City.  He blogs at The New Crossroads.

Read other Talking Union posts by Gregory Heires.

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