We often speak of the wealth of Maryland, of our low (10%) household poverty level under federal measures. Yet living above the federal poverty level in Maryland leaves many of our neighbors struggling to meet basic needs. Poverty measures don’t reflect the financial realities for many families. Maryland’s Association of United Ways completed a report on poverty that compels us to rethink how we see and support families living in financial hardship – a report they call ALICE.

What’s ALICE? ALICE stands for Asset Limited, Income Constrained, Employed – basically those working households who live above the federal poverty level but below our state’s actual cost of living. These are families who live on the edge of financial disaster, where when everything goes right, ends are met; but where one family crisis forces a choice between housing, child care, food, transportation or health care. Bleak, consequential choices that can throw an otherwise surviving family into poverty.

Where’s ALICE? Over a third of families in Maryland either live in poverty or ALICE. Lest we think this is Baltimore City’s problem, whose poverty and ALICE level is a staggering 45% of all families, Baltimore County’s poverty and ALICE level is closing in at 40%. Howard County is approaching 25% and Anne Arundel is approaching 30%. The report explains that ALICE families come in all ages, ethnicities (though families of color are overrepresented), educational backgrounds (though skewed to those with limited education), and live everywhere.

Why so many ALICE? The United Way Report lists four basic reasons why there are so many ALICE households in our region:

• Over 50% of all jobs in Maryland pay less than $20 an hour and these jobs are forecasted to outpace higher paying jobs over the next decade – meaning more Maryland families will become ALICE.
• Household living expenses are outpacing wage growth – the United Way’s measure of the income threshold required for a family to escape ALICE is almost three times the $23,000 poverty level and the gap will only grow.
• Well-paying jobs aren’t located where affordable housing exists – and the transportation infrastructure (or a family’s ability to afford its own dependable transportation) haven’t kept pace with these changes.
• There is a gap (compounded by a misperception) between what public and private dollars cover and the financial gap actually faced by ALICE families –with the greatest challenges being increasing health care, housing and child care costs.

What to do with ALICE. The first step is to see ALICE for what it is – a sobering but insightful way to understand the challenges and choices faced by many of our neighbors just to survive – neighbors we haven’t fully focused on. The second step is to use these metrics to rethink policies at the public and foundation levels towards reorienting how we help ALICE families become self-sufficient. The United Way Report urges focus on these policy discussions, as there are broader demographic challenges facing Maryland – noting that we’re one of the fastest growing states, but also an aging state (with associated health care needs), with ALICE families increasingly spread among our jurisdictions; we’re also an increasingly diverse state through international migration, and we still struggle with immense economic disparities by race. The report’s concludes with a mandate that we need to think structurally and creatively about the future of job growth in Maryland. We have to buck the trend that low-paying, low-skilled, service level jobs will remain the coin of the realm for most of us. Nothing will lift families out of ALICE faster than well-paying, skilled jobs – not support that fills symptomatic gaps, not kismet. Jobs matter most; otherwise whatever well-intentioned funding we undertake to help those ALICE families in greatest need will inevitably come up short.

With more than 30 years’ experience in law and business, Newt Fowler, a partner in Womble Carlyle’s business practice advises many investors, entrepreneurs and technology companies, guiding them through all aspects of business planning, financing transactions, technology commercialization and M&A. He chairs the Board of TEDCO and serves on the Board of the Economic Alliance of Greater Baltimore. Newt can be reached at nfowler@wcsr.com.