Even before the COVID-19 pandemic forced many businesses to close or reduce their hours and caused a wave of layoffs, nearly 40 percent of families in the state were struggling to get by, according to a new report from the United Way chapters in Maryland.
In 2018, the most recent year for which data is available, 39 percent of Maryland’s 2.2 million households were one emergency away from financial ruin, a 10-year high, the nonprofit reported.
More than 80 percent of those households made more than the federal poverty limit but still struggled to afford basic necessities like food, housing, healthcare and childcare, what the group calls Asset Limited, Income Constrained, Employed, or ALICE, homes.
According to the United Way of Central Maryland, the cost of survival in the state ranges from $33,636 for a single adult to $36,804 for a senior citizen, and is as high as $87,156 for a family of four with an infant and a preschooler.
That equates to hourly earnings of $16.82, $18.40 and $43.58, respectively.
The state’s minimum wage increased to $11 per hour this year, part of a law that will eventually raise wages to $15 per hour by 2025, but that only works out to an annual income $22,000 for a full-time, year-round worker, the group said.
The federal poverty level in 2018 was $12,140 for a single adult and $25,100 for a
family of four. It now stands at $12,760 for an individual adult and $26,200 for a family of four.
In an introductory letter to the report, United Way of Central Maryland President and CEO Franklyn D. Baker said many ALICE workers–first responders, health care workers, grocery store employees–have been critical workers for local communities during the pandemic.
“The research reveals persistent and widening income disparities in Maryland, particularly among Black households and those of other races and ethnicities within the state,” Baker wrote on behalf of United Way chapters across the state. “Our collective work toward equity as a community must include equal access to financial stability for all.”
Baker also said the data identify the households most at-risk to the economic impact of the pandemic and can set a baseline to show how deeply they have been affected.
More than half the households in Baltimore City and Allegany and Somerset counties met the criteria for ALICE in 2018.
Howard and Carroll counties were the only jurisdictions in the state where fewer than 30 percent of households were above the poverty line but unable to pay for necessities.
According to demographic data in the report, a greater percentage of African-American and Hispanic households–about half for both groups–were either living in poverty or ALICE homes. By comparison, the same could be said for about one-third of white households.
Younger people were the demographic group hurting the most, with 70 percent of people age 25 and younger not making enough money to purchase all the essential goods and services they need.
Data show the number of households in poverty dipped below 200,000 in 2018 after reaching more than 209,000 two years prior. But the number of homes meeting the conditions for ALICE has climbed steadily since 2010, reaching a high of 661,534 families two years ago.
The cost of living in the state, particularly in the Baltimore-Washington region, has grown as the population has increased, creating more demand for low-cost rental housing, particularly among seniors and millennials, the report said.
And since 2007, the number of high-wage jobs has declined and the number of medium-wage jobs (paying between $21.79 and $43.58 per hour) dipped slightly, while the number of low-wage jobs (less than $21.79 per hour) surged.
“The number of low-wage jobs increased by 61% during that period and accounted for the largest number of jobs in Maryland in 2018,” the report said.
Of 4.8 million people age 16 and older, only 67 percent of Marylanders were in the workforce, and half of them were being paid an hourly wage instead of a salary, the report said.
The United Way concludes that, in addition to the added health and social benefits, raising the wages of Marylanders would grow the state’s economy by $80 billion per year, both through increased consumer spending and tax revenues.
A group of medical professionals, researchers and academics compiled the report using demographic and economic data, and federal guidelines on housing and poverty. The report is sponsored by health insurance company Kaiser Permanente.