ALICE in Arkansas

ALICE stands for Asset Limited, Income Constrained, Employed. These are families and individuals who work but have lower incomes and therefore struggle to make ends meet. While they live above the federal poverty level, they are often unable to afford basic needs such as food, housing, child care, healthcare, and transportation. The ALICE effort compares incomes with the minimum income needed to cover basic needs (the ALICE threshold). ALICE provides a better indication of how many households are struggling than the federal poverty level, which was created in the 1960s and tied mainly to food costs. Although poverty thresholds are updated every year to account for inflation, the basic definition hasn’t been updated to reflect the wide range of necessities that modern families and individuals must pay for. ALICE also takes regional cost-of- living differences across the U.S. into consideration.

In 2021, 47% of households in Arkansas were below the ALICE threshold -- much higher than the 16% of people who live in poverty across the state, from 2018-2022.

The map below is a swipe map, which shows ALICE rates on the left side and poverty rates on the right. Move the swipe bar left or right to compare ALICE and poverty rates for different counties within the state. Click on the legend button (bottom left) to see the legend for each map. Click on individual counties to see their local data.

In 2021,more than half the households in 43 of Arkansas' 75 counties live beneath the ALICE threshold. The counties with the highest rates include Phillips (63%), St. Francis (64%) and Lee (66%). ALICE rates vary greatly across racial and ethnic groups: 67% of Black households fall beneath the ALICE threshold while only 34% of Asian households do.

Interacting with the chart below: Hover over the chart to see the percentages of households in poverty, above poverty but below the ALICE threshold, or above ALICE, by race/ethnicity.

Looking at the economic landscape in Arkansas can help us understand what contributes to the cost of living and why it often outpaces income.

Housing costs are rising nationwide and in some areas becoming very unaffordable. While Arkansas as a whole has fairly affordable housing, it is not exempt. The federal government defines affordable housing as consuming no more than 30% of a household's income. Households that pay more than that are considered housing burdened.

The map below measures the overall housing burden for each county in Arkansas. The average rate of income spent on housing ranges from 8.8% in Calhoun County to 30.6% in St. Francis County. This shows that housing unaffordability is prevalent in some parts of the state.

HOUSING AFFORDABILITY MAP, PENDING ACS DATA RELEASE IN DECEMBER

Child care has become increasingly expensive, a particular burden for families with young children whose care is the most expensive. The scarce availability of quality childcare options drives up the prices. In 2021, the average monthly cost of child care in Arkansas was $761 for a family of four, according to United For ALICE.

As seen in the map below, the cost of child care per day differs throughout the state going as high as $38 per day in Benton and Washington counties. High costs can force parents to drop out of the workforce or switch to part-time employment, significantly impacting household income.

According to the National Consumer Law Center, medical debt is the leading driver of personal bankruptcy and has become a crisis across the nation. Although close to 90% of Arkansas adults have health insurance, including public programs such as Medicaid and Medicare, many still incur significant medical debt for costs not covered by insurance.

In Arkansas, 18% of people have medical debt in collections, with a median amount of $561. This varies greatly throughout the state, from 36% Poinsett County to 10% in Saline County, and by race and ethnicity, with a rate of 17% for White communities and 22% for communities of color.

Along with the challenge of rising costs, many Arkansans have incomes that have not kept up with inflation, even before inflation began soaring. The median household income in the state was only $56,000 in 2018-22, which after adjusting for inflation increased 9% since 2008-2012. And some parts of Arkansas have even lower median incomes, such as Lee and Chicot counties with median incomes below $37,000. Incomes are also lower among people of color, with Black or African American households having a median income of just $37,395. Large and persistent disparities in income are the result of historic and current policies and practices that disadvantaged people of color.

Although ALICE households face numerous challenges, resources and policy solutions exist to address this issue.

The Arkansas Coalition of Housing and Neighborhood Growth for Empowerment (ACHANGE) is a coalition of non-profit organizations created to address housing issues in the state. Its website includes a resources page that can help ALICE households find affordable housing and assistance programs.

The State of Arkansas Child Care Assistance Program provides financial assistance to families with low-incomes for quality child care. In order to qualify for the program, each adult in the household must work and/or attend school for at least 30 hours per week and meet income guidelines.

RIP Medical Debt is a national non-profit organization working on strengthening communities by abolishing medical debt that is financially burdensome. The organization buys medical debt in bundles at a fraction of the original cost and uses donations to erase medical debt. The organization uses data analytics to target the debt of households that earn less than 4 times the federal poverty level.

The Arkansas Community Foundation and other local partners raised $225,000 that enabled RIP Medical debt to purchase and forgive $35 million dollars of medical debt in the state. Although individuals cannot apply for debt relief, and the debt bought is only in large portfolios, RIP Medical Debt has a resource page on its website to help people navigate medical debt.

ALICE data helps policymakers understand the true level of financial hardship facing residents. To get more involved in this issue, Arkansans can use the data to inform action in their communities:

• Learn about policies and programs at the  ALICE in Action  webpage.
• Explore the  Policy Rules Database  from the Federal Reserve Bank of Atlanta, a repository of existing public assistance programs and tax policies that models benefit cliffs that can affect ALICE workers.
• Advocate for policy, programs and services that benefit ALICE households.
• Contact a  local United Way  for volunteer opportunities.
• Use United for ALICE's  Legislative District Tool  to find representatives and explore local ALICE household data.