February 24, 2017

Sunshine is a Poor Substitute for Opportunity: Cost of Living in Florida Puts Fiscal Burden on Struggling ALICE Families

Last week, United Way of Florida released its 2017 United Way ALICE Report. The report focuses on families that are ALICE, which stands for Asset Limited, Income Constrained, Employed. ALICE households are working individuals or families that exceed the poverty level, but have difficulty paying basic costs of living.

While 14.5 percent of Floridian families live below the poverty level, an additional 29.5 percent earn less than the minimum required for basic living expenses. Accordingly, 44 percent of Florida households are struggling economically. That’s 3.3 million families.

In Florida, the average survival income for a family of four, including an infant and a preschooler, is $53,856 ($26.93 per hour). At this level, families have meager savings, if any, and income is allocated solely for housing, child care, food, transportation, health care, taxes and other living expenses.

These are not Cadillac expenditures. Housing is based on fair market rent for a two-bedroom apartment. Child care is based on the average cost of home-based care. Food costs are based on the U.S. Department of Agriculture’s Thrifty Food Plan and transportation costs are based on Florida average expenditures. The $400 per month allocated for miscellaneous expenses includes toiletries, cleaning products, clothing and other necessary items that are not included in the other budget areas. The budget also includes out-of-pocket health care costs and taxes, including deductions, exemptions and credits.

Florida is primarily a service economy, so most jobs do not pay well. More than two-thirds of full-time jobs in Florida pay less than $20 per hour. Looking ahead, 82 percent of the new jobs created through 2023 will pay less than $15 per hour. Only one of the 20 most common service occupations pays a wage sufficient for survival (registered nurses earn an average of $29.87 per hour).

The state has not supported those who make the service economy possible. The lack of affordable housing is a real issue for many families. High housing costs divert funds from other essential areas such as groceries and health care. The report estimates that Florida needs to make available at least 527,000 additional affordable rental units for its residents and families through housing vouchers or subsidies.

So, Florida has a problem. The hard-working people who are the backbone of our economy can’t enjoy its benefits. Low wages, high costs and the state’s aversion to programs that provide families a hand up yields a three-legged stool. This is a prescription for failure for Floridians and for future generations. It is also a disincentive to attracting businesses from other states.

There are several steps that the state must take to help ALICE families stay afloat.

At the very least, full funding for affordable housing yields short and long term economic returns, not only for the beneficiaries of the housing, but also for the communities in which they reside. Affordable housing generates construction jobs, as well as jobs in ancillary real estate services. In the long-term, affordable housing boosts retail sales related to home furnishings and maintenance. The modest increase in disposable income will result in increased spending on household needs and children’s activities. There is already dedicated funding for affordable housing in statute, so no funding would be incurred beyond its dedicated source. This funding should be fully leveraged.

The state must also encourage the creation of additional small businesses and provide the tools for these businesses to be successful. This would help to create a more diversified economy in which hard-working Floridians could earn at least a survival wage and be able to advance within their careers. Small businesses provide a wealth of employment opportunities and local economic growth.

Finally, the state must recognize that safety net programs are a lifeline for families that work within the constraints of Florida’s job market. To the extent that the state provides supports for the children in these families, the children benefit physically, developmentally and intellectually now and in the future. A meager state investment in these children pays for itself multifold as these children mature.

Florida cannot let ALICE families flounder. It must find a course of action that enables these residents to continue making the state a great place to visit and live.

Until then, we still have sunshine. If only sunshine would pay the bills.

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