Westchester ALICE FamiliesWestchester ALICE Families Temporarily Benefited from Pandemic Assistance, yet the Ranks of Poverty Rose by 16%

Despite the influxDespite the influx of pandemic assistance and tax credits that benefited many Westchester households in 2021, over 125,000 families, or 34% of households, still struggled to afford the basics, according to a new report from United Way of Westchester and Putnam and its research partner United For ALICE. Additionally, the report found that the number of households below the poverty line increased by 16%. Finally, it found that the cost of six household essentials in New York State has risen at a faster clip than inflation, leaving low-wage workers priced out of affording the basics.

The 125,562-family calculation includes the 37,425 households in poverty as well as another 88,137 families defined as ALICE (Asset Limited, Income Constrained, Employed), earning above the Federal Poverty Level but less than what’s needed to survive in the modern economy. ALICE families have been overlooked and undercounted by traditional poverty measures. ALICE is the nation’s childcare workers, home health aides, and cashiers heralded during the pandemic – those working low-wage jobs with little or no savings and one emergency from poverty.

ALICE in the Crosscurrents: COVID and Financial Hardship in Westchester shows that the total number of financially insecure households dropped by 1% between 2019 and 2021 – compared to the county’s 5% increased overall population, which was attributed to the migration of New York City residents to Westchester during the pandemic. The number of ALICE households decreased by 6,345 during that time. In contrast, there were 5,285 more families in poverty.

The report also showed that racial disparities persist in the rates of financial hardship; 47% of Black and 46% of Hispanic households were below the ALICE Threshold in 2021, compared to 33% of White households.

“The data from the ALICE report shows that while ALICE exists in every community, the population is not equally distributed,” said United Way of Westchester and Putnam CEO Tom Gabriel. “Communities with the greatest diversity, such as Mount Vernon and Yonkers, have the largest ALICE populations, while communities with the least amount of diversity have low percentages of ALICE populations. The report also showed that the increased minimum wage and the tax credits that were available in 2021 helped those households on the cusp of being below the ALICE threshold to rise above it and be more financially secure.”

While job disruptions and inflation delivered significant financial pain, a combination of pandemic supports and rising wages did help to blunt what could have been a deeper financial crisis, the report finds. However, as some benefits are peeled back and inflation persists, signs of greater financial stress are on the horizon.

According to the report, for a family of four with an infant and a preschooler, the annual ALICE Household Survival Budget, which is the basic cost needed to live and work in Westchester, was $116,520 in 2021. The Child Tax Credit and Child Dependent Care Tax Credit helped to soften the blow, bringing the family Survival Budget down to $94,140.

“The ALICE report shines a necessary light on an overlooked group of our neighbors across affluent Westchester County. These folks – from seniors to families to young adults – are working hard and still can’t make ends meet,” says Karen C. Erren, Feeding Westchester‘s president & CEO. “The findings of United Way’s report underscore the critical role that our local food pantries and feeding partners play in providing meals to these households. Through their services, ALICE households can get much-needed nourishment and focus their tight budgets on other essentials.”

The ALICE Essentials Index shows basics rising in price by 5.5%, with projections for 2022 and 2023. In contrast, inflation — as measured by the National Consumer Price Index (CPI) — rose 4.8% during that time.

The ALICE Essentials Index tracks the rising cost of essentials, including housing, childcare, food, health care, transportation, and a smartphone plan. In contrast, CPI tracks inflation across more than 200 categories of goods and services, including luxury items, such as power boats and landscaping services. Yet, CPI is used to calculate increases in critical support for low-income families, including Social Security and Medicaid.

“ALICE doesn’t buy power boats or hire landscapers — ALICE is doing the landscaping,” said Gabriel. “ALICE is simply trying to afford safe housing and dinner on the table. The ALICE Essentials Index recognizes this disconnect and provides a new, targeted inflation measure that could help guide eligibility and increases in assistance programs. Equipped with the ALICE report, we can do even better to develop effective policies and track our progress toward reducing financial hardship in Westchester County and in New York State. We have an opportunity to build on what was learned during the pandemic as ALICE continues to face economic uncertainty.”

“Thank you to United Way for shining a light on the struggles so many Westchester and Hudson Valley families continue to face,” said Kathy Halas, executive director of Child Care Council of Westchester, Inc. “Westchester County recognized that childcare is essential, and often unaffordable, so they funded the Westchester Works Child Care Scholarship Program, which helps ALICE families. NYS has expanded families’ eligibility for childcare assistance through the Department of Social Services as well. These investments are steps along the way to a universally accessible system of high-quality childcare.”