Although 89 percent of New Jerseyans live above the poverty line, only 61 percent can make ends meet, according to a United Way report released Monday.
The remaining 28 percent fall into a group called ALICE — Asset Limited, Income Constrained, Employed — that’s defined as those earning above the poverty line but less than a basic cost of survival.
The number of households struggling to meet basic needs rose 15 percent between 2010 and 2016, according to the report. During that time, the basic cost of living rose 16 percent to $26,640 annually for a single adult and 28 percent to $74,748 for a family of four with an infant and preschooler. That outpaced median earnings, which increased only 12 percent.
Employers can ease the burden for ALICE employees, according to United Way ALICE Project Director Stephanie Hoopes.
“Increasing wages is obviously something that would make a big difference to an ALICE household, but as you dig in, you see that there is a lot more that matters to ALICE workers,” she said. “It can be simply from availability of child care, and some employers have that on-site or subsidize it. Some don’t, and that becomes a challenge for ALICE workers to afford quality care and for finding child care with hours compatible to yours.”
For ALICE workers, if staying late at work means being charged an extra hour or more for child care, that might be an hour they can’t afford. Child care is one of the biggest drivers of cost increase, up 14 percent from 2010 to 2016. The other biggest drivers of cost increase were out-of-pocket health care costs, up 99 percent, and transportation, up 25 percent.
Employers are sometimes unaware of the hardships their employees face, Hoopes explained. When made aware, they’re often willing to help.
“One of the first times I saw this happen is a few years ago,” she said. “We were talking to some young businessmen about if ALICE’s car breaks down [due to transmission failure and] it costs $700 to replace the transmission, they can’t do it and they lose their job. This guy looks at me and says, ‘We have company cars. I could loan them a car for a week or two. Why not ask me?’ There’s an easy, direct way a company could make a huge difference for a family.”
In the private sector, 51 percent of ALICEs are employed by small businesses, many of which wouldn’t be able to provide a private car. They can still offer help with transportation, such as having a van pick employees up near the public transportation station closest to work, allowing them to forego the need for a car to get to work.
An additional help employers can offer comes around tax time at no cost to the employer. They can partner with a nonprofit that offers free tax services to ensure ALICE is getting as much back on his or her tax return and ease the burden of having to use a paid preparer.
“The average tax return can cost you $270 to prepare and file,” Hoopes said. “I’m not going to malign any of the paid-preparer companies, but often we have people who haven’t gotten all that they should have gotten back.”
Nonprofits like United Way partner with employers and offer help through the IRS’ Volunteer Income Tax Assistance program, which offers free tax preparation to people who make $54,000 or less, those with disabilities and non-native English speakers.
“This is a serious program and we have people who get back thousands of dollars in their income tax credits that they had never gotten before,” Hoopes said. “It sounds like a small thing, but it’s a huge thing employers could do.”