Poverty study highlights economic disparities across Louisiana parishes
1st February 2016 · 0 Comments
By Della Hasselle
Contributing Writer
Ashley Duran, a Louisiana resident and coffee barista, has to make what she calls “tough decisions” since she became a single mom. For one, she said, she had to give up the career she had been building as a restaurant manager to care for her son, who is now five years old.
Since she’s gone back to being a barista, her schedule allows her to work only while her son is in school, she said. It also means she makes less than $8 an hour.
“Now, I watch out for every dollar I spend and when I spend it,” said Duran, who is in her 20s and lives in Lafayette. “If my car breaks down, I’m not sure what we’ll do.”
Duran and her son make up one of the 695,719 households living in Louisiana considered to be the working poor, which comprise about 40 percent of the state’s residents. They may have jobs, but don’t make enough money to “get by,” or meet their basic household needs.
In New Orleans, that rate climbs to nearly half of the city’s residents.
Duran’s story, and the accompanying statistics, was part of the sobering message put forth last week by the Louisiana Association of United Ways. On Tuesday, the organization released its first comprehensive report examining poverty and income inequality in Louisiana.
Called The United Way ALICE report, the study aims to give a voice and identity to those who can’t afford the state’s cost of living, including housing, child care, food, transportation, health care and taxes.
The report focuses on families who live below the federal poverty level. But it also highlights those who live above that threshold, and work hard, but still struggle to make ends meet.
The organization has dubbed the latter population ALICE, which stands for Asset Limited, Income Constrained, Employed. Even the families who cross over the poverty threshold, but still fall in that category, have wages that can’t support a basic household budget.
“When it comes to paying things, I’m on time with my rent and car insurance, but everything else is usually a month behind,” Duran explained, adding that she tries not to stress her son out about the “strict” budget at the grocery store, or the limited things the two can do for fun. “I look forward to income tax season. It’s the only time I can catch my breath. And then I do it again for another year.”
Duran is by no means alone. ALICE lives in every parish in Louisiana, according to the Sarah Berthelot, the president and CEO of Louisiana Association of United Ways.
In some parishes, ALICE is more present than others. For example, in Orleans, St. Bernard and Jefferson parishes, the number earning less than the United Way’s threshold is 51, 47 and 41 percent, respectively – all higher than the state’s average of 40 percent.
In the immediate New Orleans area, St. Tammany has the lowest rate, with only 31 percent falling above that threshold. St. John falls at state average, at 40 percent, and the percent of families who struggle to make ends meet in St. Charles and Plaquemines fall somewhere in-between.
“You may not realize it, but you already know ALICE. We see ALICE every day – hard workers who keep Louisiana’s economy running, but who aren’t always sure that they can put food on their own tables,” Berthelot said in a letter prefacing the report. “We find ALICEs each day working behind cash registers, fixing our cars, serving us in restaurants and retail stores, and caring for our young and our elderly.”
The report, which was officially released to the public on Tuesday, zeroes in on those who often have little or no savings, and “are one emergency away from falling into poverty,” Berthelot said. The population includes clerks, teachers and mechanics.
In 2013, the federal poverty threshold was $23,550 for a family of four. Often, that’s the number used by federal aid programs such as childcare assistance, welfare, or food stamps – for those who cross over, even barely, assistance declines dramatically.
But in today’s world, the Louisiana Association of United Ways estimates that it takes $42,444 for two parents, an infant and a preschooler every year to pay for basic necessities, and not skip bills. The number doesn’t even allow for a savings account for emergencies or long-term financial planning.
In other words, the report says “the federal poverty level is no longer a realistic measure to define the level of financial hardship in households across each parish in Louisiana.”
Duran can relate. In her testament, made public as part of the United Way’s online report, she said she applied for food stamps, but was denied. She would go back to the office to figure out why, but can’t take a day off work.
“I’m not ripping off the government,” Duran said. “I’m not feasting.”
According to United Way, 208,000 ALICE households like Duran’s can be found in Southeast Louisiana alone.
The main reason so many families struggle here is the lack of high-paying jobs, the report says. More than 70 percent of jobs in Louisiana pay less than $20 per hour, and most pay less than $15 per hour.
Housing costs are also a culprit, the report notes. After Hurricanes Katrina and Rita, and through the Great Recession, housing affordability fell by one-third, while job opportunities fell by nine percent.
And while government, nonprofit and healthcare assistance provides $10 billion on ALICE and poverty-level households in Louisiana alone, it’s still 14 percent short of lifting those families out of ALICE threshold.
Often, the report states, these families try to cut corners by forgoing health care or insurance, living in substandard conditions or saving money on lesser quality schools for children.
In turn, a cycle persists, as families continue to see health problems, learning deficiencies and low-paying jobs. And society suffers through increased taxes and insurance premiums.
During a press conference announcing results of the report, members of the United Way’s advisory council said they aimed to help ALICE households by giving them a voice.
Adrienne Slack, vice president and regional executive of the Federal Reserve Bank of the Atlanta-New Orleans Branch, said she hoped the data would influence policy.
“What this data does is it puts a very fine point, a really great picture of what the budget of an ALICE household is,” Slack said. “My hope is this will help the United Way serve as convener in the communities it serves, to really help the organizations that are focused on the issue of poverty pull together in one direction.
This article originally published in the February 1, 2016 print edition of The Louisiana Weekly newspaper.