BATON ROUGE, La. (BRPROUD) — A new report shows how many households in Louisiana have financially struggled since the COVID-19 pandemic started.
United Way officials said with Louisiana’s current minimum wage and high inflation, it’s getting harder for working-class families to survive, leaving them one paycheck away from poverty.
Residents who are living in ALICE (Asset Limited, Income Constrained, Employed) households earn above the Federal Poverty Level yet cannot afford the basic cost of living, according to the Louisiana Association of United Ways. The report titled ALICE in the Crosscurrents: COVID and Financial Hardship in Louisiana outlines the number of households impacted in 2021.
“Understanding these persistent challenges for families, and what it takes for them to meet their needs is critical as we move forward in our state’s recovery,” said Sarah Bethelot, president and CEO of the Louisiana Association of United Ways. “The job interruptions, rising inflation, and disaster losses have pressed hard against ALICE over the past three years. For ALICE, moving forward may be challenging as temporary benefits expire.”
The report states that Louisiana households experiencing financial difficulty are still officially undercounted. The FPL reports 19%, or 339,916, of households in the state were in poverty in 2021, however, data shows that another 32%, or 562,552, fell into the ALICE category. According to the report, Louisiana has the second-highest rate of families with income below the amount needed to survive with 51% of 1,776,260 households.
Louisiana, comparing 2021 income status to other U.S. states, ranked 50th.
The highest rates of those living below the threshold were Black households, young households and single-parent households. Research also found that households in rural parishes had a higher rate than urban parishes, 59% vs. 49%. The parish with the largest increase in the number of households below the ALICE Threshold was East Baton Rouge Parish, which was up 18%, the report said.
Baton Rouge teacher Aneecha Bradley said there’s not much room for error or emergencies with her income despite the hard work she puts in. As a mom, she wants to make sure her two kids are smart with their money. Bradley said she uses real-world examples to teach her son and daughter about finances and savings.
“I’m practical. One paycheck each month mostly goes to my mortgage, the other paycheck is for the light bill, car insurance, life insurance, food and to pay off I needed to improve in the house after I bought it,” said Bradley.
How much are ALICE households bringing home?
“The crux of the problem is a mismatch between earnings and the cost of basics,” the report stated.
Out of the most common jobs in Louisiana, the report said 75% paid less than $20 an hour in 2021 while the wage needed to live as outlined in the ALICE Household Survival Budget was $13.38 an hour for one full-time worker or $33.14 an hour for a family of four.
Recent surveys showed that households living below the ALICE Threshold continue to face food insufficiency, difficulty paying bills, medical debt, reduced savings and feelings of anxiety and depression, the report said.
Louisiana families who reported struggling to pay for food, rent/mortgage, car payments and medical expenses increased from 55% in August 2020 to 64% in November of 2022, according to the report.
“Whenever we can help ALICE build their workforce skills, they can be employed and enter into a higher wage job. Another way is to ensure that ALICE understands all of the forms of help that’s available to them, based on their needs and location,” Berthelot said.
The United Way notes that learning how households struggle is important to determine how to allocate money for programs. People in Louisiana can help by learning more or contacting their local United Way.
The United Way in the Baton Rouge area welcomes volunteers and offers multiple resources for those in need.
“Capital Area United Way is committed to serving the ALICE population through creative giving, volunteering, and advocacy opportunities,” said George Bell, president and CEO of CAUW. “We know that ALICE solutions in our Louisiana Capital Area must be diversified and unique, just like our wonderful citizens.”