Almost half of New Orleans families don’t earn enough to meet their basic needs.
That’s a finding of a report due out Wednesday from the Louisiana Association of United Ways. Though other United Way affiliates have released similar statewide reports, it is the organization’s first comprehensive examination of poverty in Louisiana.
The study was compiled with the input of five national researchers and a 19-member Louisiana advisory committee, including a representative from the Data Center, a local nonprofit research group that periodically examines the effects of poverty in and around the city.
It zeroes in on families who earn incomes under the federal poverty level, as well as those who live above that threshold but do not earn enough to cover basic costs like housing and food.
It describes the latter group as “asset limited, income constrained, employed,” or ALICE for short. These families often don’t receive enough public and private financial assistance, researchers said.
“Basic needs,” according to the authors, include housing, child care, food, transportation, medical care and taxes.
For a family of two adults and two small children, the authors estimate that it takes $42,444 annually to pay for those necessities, an amount that leaves no room for long-term savings or extra cash to deal with unexpected financial setbacks.
That’s almost twice as high as the federal poverty threshold, which was $23,550 for a family of four in 2013. Though federal aid programs often use that bar to gauge need, United Way’s research suggests that it’s outdated, the authors said.
“The federal poverty level is no longer a realistic measure to define the level of financial hardship in households across each parish in Louisiana,” the report says.
The federally defined poverty standard has frequently taken heat from advocacy groups that say it fails to consider the actual cost of living.
About 40 percent of Louisiana’s families earn less than the United Way’s threshold. When examining the New Orleans area, close to a third of families in St. Tammany, Plaquemines and St. Charles parishes do so, while between 40 percent and half of families in St. John the Baptist, Jefferson, Orleans and St. Bernard parishes do so, the report noted.
The main culprits, according to the authors, are a dearth of good jobs — 71 percent of Louisiana jobs pay less than $20 per hour, the authors note; the rising cost of housing and other basic expenses; and limited public and private aid.
The report also outlines the problems that poverty causes. As more families earn less than they need to survive, they make sacrifices that hurt themselves and others. They may live in substandard housing, eat unhealthily or enroll their children in substandard preschools, all to save a few dollars.
In the end, those sacrifices lead to decreased job productivity, learning deficiencies and health problems, the report states. Society pays for those ills long term, through increased taxes to pay for public school enrichments, increased health insurance premiums and other adverse effects.
Solving these issues boils down to either increasing these residents’ incomes or reducing their expenses. That may be done through subsidized child care programs, loans, higher wages or an increase in affordable housing, the report notes.
“The biggest impact on income opportunity would come through a substantial increase in the number of medium- and high-skilled jobs in both the public and private sectors,” the report says. “Such a shift would require an influx of new businesses and possibly new industries, as well as increased education and training.”
Follow Jessica Williams on Twitter, @jwilliamsNOLA.