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Report: One-third of Md. households live paycheck to paycheck

One in three Maryland residents struggles to make ends meet and has to make tough decisions about finances every day, United Way reported in a study released Monday.

Some 750,000 people in the state are classified as Asset Limited, Income Constrained, Employed (ALICE). Those are individuals and families that do not make enough money to have a “survival budget” that covers basic needs including: food, housing, health care, transportation, child care and taxes.

Those families live paycheck to paycheck, and in some cases, might even be one paycheck away from homelessness. A family of four needs to make $61,000, more than double the Federal Poverty Line figure of $23,850, to meet that threshold. A single ALICE adult’s annual budget is almost $24,000 to meet basic needs, compared to the Federal Poverty Line threshold of just over $11,000, the report said.

The amount needed to sustain a household, what the report calls a “stability budget,” is $39,000 for an individual and almost $122,000 for a family of four, the report said.

The findings in the first such study conducted by United Way’s Maryland chapters are not surprising to people who know and work with ALICE individuals and families.

“In many ways, the data reinforces what the reality is for many of us,” said Franklyn Baker, president and CEO of United Way of Central Maryland.

Statewide, 25 percent of Maryland households fall under the ALICE threshold, based on 2014 numbers, up from 18 percent in 2007. Ten percent of households are living below the poverty level, bringing the state’s total vulnerable residents to 35 percent of the population, the United Way report said.

ALICE families and individuals live all over the state. The highest concentration of those vulnerable individuals live in Somerset County, with 53 percent of the population classified as ALICE. The lowest concentration lives in Howard County, with ALICE individuals and families making up 22 percent of the population. Some 45 percent of Baltimore residents live below the ALICE threshold, which is about 240,000 people.

Compared to 12 other states that conducted the same study, Maryland has the third-lowest percentage of residents classified as ALICE. New York had the highest percentage of vulnerable residents, making up about 45 percent of the state’s population.

Most people who qualify as ALICE work in low-wage jobs that pay less than $20 per hour, usually with an hourly pay of between $10 and $15. Those people tend to be cashiers, administrative and nursing assistants, waiters, laborers and security guards or hold other jobs in the retail and food industries. With costs of living rising faster than wages, the report found that the basic cost of living in Maryland is higher than what jobs can support.

United Way wants to use this study to raise awareness about people who aren’t necessarily below the poverty level but still struggle to make ends meet and don’t qualify for government assistance, Baker said.

Whether it’s raising the minimum wage or offering resources to that population, United Way wants to bring people together from academia, health care the government and the private sector to address the issue. The study seeks to build a foundation for that conversation, said Baker.

“This is a striking assessment of what we need do to move more Marylanders to a place where they’re stable,” he said.

United Way plans to do another study in two years but recognizes that it will take at least a decade to move the needle on the issue, Baker said.


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