Exclusive: 40% in U.S. can't afford middle-class basics
At a time of rock-bottom joblessness, high corporate profits and a booming stock market, more than 40% of U.S. households cannot pay the basics of a middle-class lifestyle — rent, transportation, child care and a cellphone, according to a new study.
Quick take: The study, conducted by United Way, found a wide band of working U.S. households that live above the official poverty line, but below the cost of paying ordinary expenses. Based on 2016 data, there were 34.7 million households in that group — double the 16.1 million that are in actual poverty, project director Stephanie Hoopes tells Axios.
Why it matters: For two years, U.S. politics has been dominated by the anger and resentment of a self-identified "forgotten" class, some left behind economically and others threatened by changes to their way of life.
- The United Way study, to be released publicly Thursday, suggests that the economically forgotten are a far bigger group than many studies assume — and, according to Hoopes, appear to be growing larger despite the improving economy.
- The study dubs that middle group between poverty and the middle class "ALICE" families, for Asset-limited, Income-constrained, Employed. (The map above, by Axios' Chris Canipe, depicts that state-by-state population in dark brown.)
- These are households with adults who are working but earning too little — 66% of Americans earn less than $20 an hour, or about $40,000 a year if they are working full time.
When you add them together with the people living in poverty, you get 51 million households. "It's a magnitude of financial hardship that we haven't been able to capture until now," Hoopes said.
By the numbers: Using 2016 data collected from the states, the study found that North Dakota has the smallest population of combined poor and ALICE families, at 32% of its households. The largest is 49%, in California, Hawaii and New Mexico. "49% is shocking. 32% is also shocking," Hoopes said.