👋 Parenting is hard. Parenting without adequate resources is exponentially harder. For children to thrive, parents and caregivers need the breathing room to nurture and bond. That’s why we look for ways to support parents and children. Relieving stress on families — whether economic, emotional, or from any other source — during this critical time helps build the foundation for lifelong physical and mental health and well-being.
During the pandemic, state and federal programs, such as increased child tax credits, child care investments, and food assistance, were a big help for people struggling to make ends meet. Child poverty dropped to a historic low of 5.2%. 🎉
- But most of the pandemic aid expired in 2022 — and the child poverty rate more than doubled.
We’ve always looked for ways to support families who are caught in the squeeze of making too little to cover the costs of living. And after being introduced to the concept of ALICE — Asset Limited, Income Constrained, Employed by United Way of Northern New Jersey CEO Kiran Gaudioso and Senior Vice President Michelle Roers, I’m encouraged by even more possibilities for bringing more attention and understanding to the challenges these families face.
This issue of Starting Early takes a closer look at what life is like for ALICE families and features a conversation with Michelle Kang, CEO of the National Association for the Education of Young Children, which advocates for early childhood educators, including childcare providers, who serve – and often are – ALICE families.
Atiya Weiss
Executive Director, the Burke Foundation
1 big thing: Understanding ALICE — a formula for economic security
The pandemic helped shine a light on frontline workers. They’re retail salespeople, healthcare workers, child care providers, restaurant staff — who struggle to make ends meet despite being celebrated as essential workers.
- To help illustrate their plight, United Way of Northern New Jersey coined the acronym ALICE and developed a formula that accounts for the real-world costs of survival. ALICE families are everyday people who work but whose earnings can’t cover the cost of housing, food, healthcare, transportation, basic technology, and other necessities — let alone saving for retirement, college, or an unexpected expense. And they often make too much to qualify for Medicaid and other government assistance.
- Launched in New Jersey, ALICE now is a national effort that’s bringing about change. From creating internet hotspots in Arkansas, advocating for childcare providers in Connecticut, and helping tenants faced with eviction in Florida, communities are finding ways to support ALICE families.
Federal poverty standards are outdated: How you measure is as important as what you measure. The Federal Poverty Level (FPL), developed in the 1960s, is an outdated tool that ignores many realities of life today. Back then, food was about a third of families’ expenses. Today, the FPL severely underestimates the costs of housing, transportation, healthcare, and child care. Plus, the FPL is the same in all 50 states even though the cost of living varies greatly. That particularly hurts families in states with the highest costs of living.
- It’s especially troubling because the FPL is more than a statistical artifact. It determines who is eligible for numerous forms of government-provided assistance.
By the numbers: In 2021, 16.2 million US households earned below the Federal Poverty Level of $26,200 for a family of 4. Another 36.3 million were above the poverty level but didn’t make enough to cover their basic expenses, such as housing, transportation, and healthcare. They are ALICE.
The bottom line: ALICE is a more accurate representation of need. It calculates a survival budget — what’s needed to get by without government assistance.
- The average New Jersey Survival Budget for a 2-parent family with 2 young children is about $8,100 per month — yet 2 adults working full time at the state minimum wage of $15 an hour gross just $5,000 a month, well above the Federal Poverty Level but far below what’s needed to meet everyday expenses and save for the future. In 2021, there were more than 900,000 ALICE families in New Jersey, including thousands of children.
One thing that makes ALICE valuable is that it considers state-level cost differences. The monthly survival budget in Texas, for example, was $6,250, and even varies from county to county within a state.
We can fix this: Public policy can address much of what makes life so tough for ALICE families.
✅ Expanded child tax credits and Economic Impact payments directly to families as part of the pandemic-inspired American Rescue Plan Act brought the first significant decline in childhood poverty.
✅ More support for child care providers, which ended last month, increased pay for child care workers and decreased costs for families — often lifting them above the ALICE thresholds.
✅ In January, New Jersey doubled state reimbursement rates for perinatal, midwifery, and community doula care, meaning increased income for these providers, and greater availability of quality, affordable maternity care for ALICE families.
Why it matters: By expanding advocacy to include ALICE families, we can bring attention and resources to more families who are struggling and help more of them get on a solid footing.
“ALICE is working hard, ALICE is helping us keep our economy running smoothly, and we have a system that’s not working for them,” explained Stephanie Hoopes, national director of United for ALICE, in a recent podcast interview with the Annie E. Casey Foundation. “It’s critical to highlight a reality that’s happening if we have any chance of finding better solutions.”
2. An interview with Michelle Kang
Early childhood educators, including child care providers, often are among the many low-paid workers who are essential to working families. We spoke with Michelle Kang, CEO of the National Association for the Education of Young Children (NAEYC) about the role of child care providers in helping children thrive. The association comprises nearly 60,000 individual members of the early childhood community and 51 affiliates.
The pandemic gave parents and employers a better understanding of the value of early childhood educators. Do you think this has had a lasting effect?
Early in the pandemic, one of the first things we heard was that — for the first time — many educators felt valued and seen by policymakers. They were called essential workers; people understood that their work was critical to our communities being able to operate.
Early childhood educators truly are “the workforce behind the workforce.” I think people realize that, without them, communities and businesses can’t thrive, and parents can’t work if we don’t have an infrastructure that includes quality, affordable child care.
But the pandemic exacerbated the challenges that were already there. Child care in the U.S. is an entirely untenable business model. Absent public funding, most working parents simply cannot afford to pay the true cost of providing high quality child care, and early educators doing the complex, skilled work of educating young children cannot support their own families on the wages they are able to make. Prior to the pandemic, more than half the country lived in areas classified as child care deserts, where the number of children under 5 needing care exceeded licensed supply by more than 3. That has not changed, and it needs to.
What will happen to early childhood programs now that the $24 billion allocated for these programs in the 2021 American Rescue Plan has run out?
Despite seeing how important these workers are, we are now back to a place where we may not be able to provide those child care opportunities to support children, families and communities.
Many providers were able to keep their doors open and to keep people in the workforce because of the American Rescue Plan funding. They were able to provide wage supplements, keep costs manageable for families, invest in their programs, and invest in educators. And now many are being forced to roll back those critically-needed changes, reducing wages, increasing parent tuition, and contemplating closing like they were at the beginning of the pandemic.
With the funds expiring, there is a spotlight back on child care in conversations — and that’s hopeful — but overall, we fear that we are going to see some providers saying “We can’t do this anymore,” further limiting the supply of quality care available to families with young children.
What major challenges do early childhood educators face?
Early childhood educators have an average wage that is often around just $13 an hour, and they often lack benefits like medical and dental insurance. So, we must fundamentally acknowledge that the core of this industry is undercompensated workers. Educators also lack access to the education and professional development opportunities that would support them in acquiring the knowledge, competencies, and qualifications that could help them advance in the field.
Despite all these hardships, they believe in the importance of creating a solid, lifelong foundation for young children, and in partnering with families so that children can reach their full potential and grow into the kinds of citizens we want them to be.
What else is on your advocacy and policy agenda to support early childhood educators?
Beyond addressing long-standing, fundamental challenges around sustaining and growing the supply of quality care and supporting increased educator compensation, policymakers at all levels of government should be prioritizing supports that advance the early education workforce. This should include dedicated funds to higher education access, scholarship opportunities and loan forgiveness, and professional development supports for current and future educators.
👂 Listen in: For more from Michelle Kang, check out this podcast episode on child care and the economy from Remaking Tomorrow.
3. Tools you can use
United for ALICE created a suite of tools to help advocates better understand the challenges of working families:
- Want to understand the impact of rising costs on ALICE survival budgets? Learn more about the ALICE Essentials Index.
- Want to see how wages for various jobs stack up against the survival budget? Try out the ALICE Wage Tool.
- What about special populations? ALICE in Focusresearch details the struggles of children, people with disabilities, and military veterans.
- Interested in digging deeper into how ALICE plays out in specific communities? The Legislative District Toolshows how families are faring in your legislative or congressional district.
- ALICE in the Room, a podcast from Kishwaukee United Way in Illinois, calls attention to those who work hard to just get by alongside those dedicated to helping them.
The roundup
- Growing our team: The Burke Foundation is hiring a program officer for Early Relational Health, child care, and family economic security and well-being.
- Expanding tax credits: A national report recognized New Jersey, Colorado, Minnesota, Oregon, and Vermont for enacting child tax credits large enough to provide real help to struggling families, encouraging other states to follow suit. The report lays out the effect of increased child tax credits on low- to middle-income families as well as what they mean for the economy as a whole.
- Bolstering maternal health: Evidence shows that community-based doulas are a critical part of a comprehensive system of care to improve our nation’s maternal health crisis. Join Prenatal-to-3 Policy Impact Center for a webinar on October 31 — Healthy Babies and Parents: How States Can Leverage Doulas to Improve Outcomes.
- Building a better NJ: Join the Center for Health Equity and Wellbeing for its inaugural Public Health Symposium October 27 on working toward a more stable and robust health infrastructure in New Jersey.
- Investing in families: LIFT recognizes that poverty – like wealth – is passed down from generation to generation. The organization is committed to breaking the cycle by investing in parents in New York, Los Angeles, Chicago, and Washington, DC. LIFT offers mentorship, financial education, direct cash support, and networking opportunities for parents to build a pathway out of poverty.
- Working together: As we close out Celebrate Babies week, Think Babies offers options to fight for struggling families by making their needs known to Congress.