School of Public Affairs and Administration and United Way of Northern New Jersey Release Second Alice Report

There are 1.2 million New Jersey households unable to afford the state’s high cost of living, the majority being growing ranks of working families struggling to survive, according to the United Way ALICE Report released by United Way of Northern New Jersey and its research partner School of Public Affairs and Administration (SPAA) at Rutgers University–Newark.

The report, “ALICE – Asset Limited, Income Constrained, Employed: Study of Financial Hardship,” shows the number of working households that cannot afford basic necessities continues to rise despite the end of the Recession, jeopardizing not only their financial security, but New Jersey’s future economic stability as well.

ALICE households are defined as earning more than the federal poverty level, but less than the basic cost of living in five key areas: housing, food, transportation, child care, and health care. Based on 2012 data, nearly 28 percent or 890,000 New Jersey households qualified as ALICE two years after the formal end of the Recession, up from 723,000 ALICE households (23 percent) at the start of the recession in 2007.

“The ALICE Report provides the data behind the stories of recent college graduates, families with children, veterans, and others earning wages for essential jobs who cannot afford the local cost of living,” said the report’s author, Rutgers University–Newark Assistant Professor Stephanie Hoopes Halpin. “It is more than a report about poverty – it is about profound changes in the structure of New Jersey's communities and economy.”

When ALICE households are combined with those in poverty, a total of 38 percent or 1.2 million New Jersey households are unable to make ends meet, up from 32 percent in 2007. This has been a crisis in the making for decades, due to systemic challenges in the structure of New Jersey’s communities and jobs, according to the report.

This is the second report of its kind for New Jersey released by United Way of Northern New Jersey and SPAA. Since the first report was released two years ago, United Ways in five other states have joined the project. Using the same methodology, state-specific ALICE studies for California, Connecticut, Florida, Indiana and Michigan are being produced for United Ways beginning this fall.

In New Jersey, government, nonprofits, educational institutions and corporations have embraced the ALICE model as a way to document the state’s growing population of financially insecure households. The United Way ALICE Report was supported in part by corporate sponsors including AT&T, Atlantic Health System, Deloitte, Novartis and The UPS Foundation.

United Way ALICE Reports provide county-by-county and town-level data, and analysis of how many households are living paycheck to paycheck, including the obstacles ALICE households face on the road to financial independence as well as the implications for the state as a whole.

The 2014 United Way ALICE Report for New Jersey reveals:

  • More than half (53 percent) of all jobs in New Jersey pay less than $20 an hour ($40,000 a year if full time) and low-income jobs are projected to dominate the state’s economy for the foreseeable future.
  • ALICE is men and women, young and old, of all races, closely mirroring the state’s basic demographic make-up. Some 71 percent of ALICE households are white and 31 percent are within prime wage-earning years of 45 to 64 years old.
  • More than three-quarters (85 percent) of New Jersey’s 560 towns have 20 percent or more households struggling to survive. ALICE is present in every town, ranging from eight percent in Chester Township and Millburn Township to 75 percent in Atlantic City, Camden, and Trenton. The average income needed to survive in New Jersey depends on local conditions and ranges from $50,000 to $75,000 annually for a family of four, more than double the official U.S. poverty rate.
  • Despite the combination of ALICE’s wages and some public assistance, ALICE households still face an average 34 percent income gap in order to reach financial stability.

According to John Franklin, chief executive officer of United Way of Northern New Jersey, ALICE individuals and families often are forced to make choices that compromise health and safety, putting both themselves and the wider community at risk of long-term societal and economic repercussions. “ALICE households are our families, friends, and neighbors and when ALICE struggles, we all struggle,” said Franklin.

“When ALICE chooses unlicensed child care or longer commutes or emergency room health care in order to put food on the table, we all suffer the consequences with future costs to our education system, heavier traffic, and higher premiums,” Franklin said. “United Way is committed to providing long-term solutions that will strengthen communities for all our residents. ALICE lives in every community in New Jersey and across the country. When life improves for ALICE, it will improve for all of us.”

For more information or to find data about ALICE in local communities, visit www.UnitedWayALICE.org.  In addition, county-by-county survival and stability budgets for six family sizes are available at: https://spaa.newark.rutgers.edu/united-way-ALICE.

About Rutgers School of Public Affairs and Administration in Newark

In developing the United Way ALICE Project, United Way of Northern New Jersey has partnered with Rutgers University-Newark’s School of Public Affairs and Administration (SPAA), an educational leader in government and non-profit management and governance. Ranked 10th nationally in public management and administration, SPAA promotes an ethics-based performance approach to effective, equitable, and accountable policy implementation through its innovative and comprehensive undergraduate, professional, and graduate degrees and certificate programs. The school’s faculty generates knowledge and best practices in public service and administration, and collaborates with public and nonprofit sector organizations and professionals throughout the United States and the world. Guided by the principles of knowledge, competence, diversity, and service – with an emphasis on public service values and competencies for effective performance – SPAA promotes accountability, transparency, and performance in the public and nonprofit sectors.

About United Way of Northern New Jersey

United Way of Northern New Jersey is a nonprofit organization working to improve people’s lives and strengthen communities by focusing on Education, Income, and Health.  These are the building blocks for a good life – a quality education that leads to a stable job; the tools needed to achieve financial stability; and good health.  We lead caring communities to create long-lasting changes that transform people’s lives.  Together, united, we can inspire hope and create opportunities for a better tomorrow. United Way of Northern New Jersey serves Morris, Somerset, Sussex, and Warren counties as well as portions of suburban Essex County, including the Caldwells, Cedar Grove, Essex Fells, Fairfield, Glen Ridge, Livingston, Millburn-Short Hills, Montclair, Roseland, and Verona.  Give.  Advocate.  Volunteer.  LIVE UNITED.  To learn more, call 973-993-1160 or visit www.UnitedWayNNJ.org.