MAKING ENDS MEET

By KAITLIN GEBBY
Posted 10/10/19

In Bradley County, 16,650  households are either living below the Federal Poverty Level or just barely scraping by, according to the recent United Way ALICE report. 

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MAKING ENDS MEET

Posted
(Editor's Note: This is the third in a series of stories exploring poverty in Bradley County and the Ocoee Region, as well as the growing number of local families now struggling to survive as the "working poor.")
 
In Bradley County, 16,650  households are either living below the Federal Poverty Level or just barely scraping by, according to the recent United Way ALICE report. 
 
ALICE, which stands for Asset Limited, Income Constrained, Employed, represents a demographic that is “virtually invisible” to systems designed to help those in need. Matt Ryerson, president and CEO for the United Way of the Ocoee Region, said these individuals and families are often one unexpected expense away from losing access to a basic need, like food, housing or transportation.
 
Bradley County comes in at 41% below the ALICE threshold, with 17% living below the Federal Poverty Level (FPL), and the remaining 24% living above the FPL but below the cost of living in the county. 
 
In neighboring Polk County, 38% are living the ALICE struggle, with 21% below the ALICE threshold but just out of reach of poverty. 
 
The ALICE report not only identifies the ALICE population living in each of Tennessee’s 95 counties, it also takes a snapshot of an ALICE household’s everyday life. This includes working at least one job, often two, using unreliable or barely affordable transportation, and exhausting remaining funds to cover the basic needs, leaving no room for savings or emergencies. 
 
Ryerson explained that these individuals often must choose which utility bill to pay, which medication they can afford, and sometimes skip meals to ensure their children are fed. 
 
A main hurdle in Bradley County and Tennessee is pay. According to the ALICE report, the cost of living “outpaces the wages of most jobs.” 
 
The cost of survival
 
The ALICE report features a Survival Budget, which is a budget that estimates the average cost of housing, food, transportation, health care and a basic smartphone plan for individuals, adding the cost of child care and multiplying costs of other needs for families. 
 
The report estimates that individuals in Tennessee working full-time should be making a minimum of $9.52 an hour to survive, while households with two children and two working adults should be making a combined $25.40 an hour to meet their basic needs. 
 
By these numbers, the ALICE threshold rests at $19,032 for individuals and $50,796 for the nuclear family. 
 
But the Massachusetts Institute of Technology (MIT) estimates the cost of living in Bradley and Polk counties is higher than the state average. 
 
“Families and individuals working in low-wage jobs make insufficient income to meet minimum standards given the local cost of living,” according to MIT. “We developed a living wage calculator to estimate the cost of living in your community or region based on typical expenses. The tool helps individuals, communities, and employers determine a local wage rate that allows residents to meet minimum standards of living.” 
 
MIT’s estimated annual cost of living for single, child-free individuals in Bradley County is $21,044 before taxes, setting the hourly rate at $10.12. The same number comes out to be $57,512 for a family with two children and two working adults, meaning each full-time working adult must earn at least $13.82 an hour to meet the suggested living wage. 
 
By MIT’s calculations, the cost of living in Polk County is identical to the cost of living in Bradley County. The table reflects no changes in the suggested hourly pay or annual cost of living for individuals and families in either county. 
 
Updated each year since its release, MIT’s cost of living calculator has caused some corporations to revisit the amount they pay their employees. IKEA, for example, increased its starting hourly rate by 17% after the MIT calculator was launched in 2014. The company announced that it would not roll out a standard minimum wage across all stores, but said it would have a starting wage based on the cost of living in each of its locations. 
 
Employing more than 2.2 million associates, Walmart is the largest employer in the world. The company has been increasing its starting salary to $11 an hour, but Walmart CEO Doug McMillion said in June this year that it should be even higher. 
 
Likewise, Cleveland State Community College has revisited its employee salaries after United Way’s ALICE report was released. 
 
Cleveland State President Dr. Bill Seymour said the salaries are decent, but vary based on education and training. CSCC employees are anticipating a 2% increase in salary thanks to additional funds awarded by the state of Tennessee, as well as increased enrollment. But, Seymour found that even with this increase, some employees would still make less than $30,000 a year. 
 
After reading the ALICE report, Seymour wanted to change the way CSCC paid its employees. In a guest "Viewpoint" piece he personally wrote for the Cleveland Daily Banner, Seymour said, once the 2020 budget is finalized, the college is adjusting its salaries so that all employees earn a minimum of $30,000 a year. With approval, the plan will be effective Jan. 1, 2020. 
 
“[The ALICE report] broadens our understanding of poverty in our community,” he told the Banner. “It’s not just the homeless downtown. It’s not just the person in line ahead of us using food stamps. It’s our neighbors and colleagues who struggle to make ends meet on a regular basis.” 
 
Seymour's "Viewpoint" piece is scheduled to be published in the Banner on the Opinion page of the Oct. 22 edition.
 
Where does ALICE work? 
 
The ALICE report identifies the top five occupations in Tennessee, which include laborers, retail salespersons, food-service employees, cashiers and customer-service representatives. The median hourly wage for individuals in these industries ranges from $8.93 to $14.77. 
 
“They hold jobs, pay taxes and provide services that are vital to the Tennessee economy … ,” the report states. “The core issue is that these jobs do not pay enough to afford the basics of housing, child care, food, transportation and health care.”
 
In Bradley and Polk counties, according to MIT, the average annual salaries for full-time food service employees are $19,751 to $23,691 for laborers and $25,337 for full-time salespersons. 
 
According to 2018 data from the U.S. Bureau of Labor Statistics (BLS), the average salary for all food-service workers in Bradley County is $15,300. Under the umbrella of all service workers in Bradley County — which includes utility workers, mechanics, car sales and retail sales — employees make an average of $36,664 annually. 
 
Ryerson brought up that the limitations in the ALICE population don’t stop at low wages and limited access to public-assistance programs. But parents and individuals may have to turn down a promotion, because earning more means they make less in the end. 
 
“I had a woman working for me, and when she turned 68, her Medicare benefits and everything changed a little bit. So, she literally came to me and said, ‘I need you to reset my salary lower.’” 
 
Ryerson explained that the phenomenon is referred to as a benefit cliff, and it plagues the ALICE community, keeping individuals on limited incomes in the same bracket. 
 
Beyond surviving
 
Using data from BLS, Consumer Reports, the U.S. Department for Housing and Urban Development, and the U.S. Department of Agriculture, the ALICE report breaks down expenditures for struggling families and individuals into the Survival Budget. 
 
As previously mentioned, these families live above the Federal Poverty Level but still struggle to pay for basic needs. The Survival Budget suggests individuals need a minimum of $1,586 a month to survive in Tennessee, while families of four need around $4,233 to make ends meet.
 
This budget is expanded upon with the monthly Stability Budget, also developed by the United Way, which shows a single adult making $2,866 a month, or $34,392 annually, making $17.20 an hour and able to put away $188 a month in savings. A family of four with two working adults is estimated to make $7,365 a month, saving $500 monthly and making $88,380 annually. 
 
“Extending beyond the Household Survival Budget, the Household Stability Budget is a measure of how much income is needed to support and sustain an economically viable household,” the report states. “The Stability Budget represents the basic household items necessary for a household to participate in the modern economy in a sustainable manner over time, with a reasonable quality of life and a measure of future financial security.” 
 
Under this budget, housing can be upgraded to a “higher quality,” child care is upgraded to a facility that is licensed and accredited rather than in-home, and food is elevated using USDA recommendations for a moderate food plan. 
 
Technology, which is included in both the Survival and the Stability budgets, has become a necessary expense and has become a point of interest in feedback on the report, according to Ryerson. 
 
He explained that the Survival Budget includes a technology expense for a basic smartphone. This does not include Wi-Fi or cable access of any kind, while the Stability Budget accounts for basic internet access and a low-cost smartphone plan. At the end of the day, Ryerson said access to technology is no longer a question of necessity. 
 
“Like it or not, I don't know how you can survive in the world today without technology. The only way to see most jobs you can apply for is online. To find deals on anything, it’s online, and communication is technology-based,” he said. 
 
In the community, Ryerson said organizations will need to step up to “come alongside” the ALICE population to bring them into a financially stable environment. 

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