Wichita families struggle to survive as the economy thrives

One set of numbers suggests a booming Wichita economy.

Wichita’s unemployment rate stood at about 3.3% in March, slightly lower than the national rate of 3.8%, both at near historic lows.

National inflation has fallen from post-pandemic highs topping 8% to more manageable levels below 4% for nearly a year.

Yet 40% of Sedgwick County residents struggle to pay for housing, food, child care and other basic needs, according to a recent report.

The United Ways of Kansas’ report on ALICE — “Asset Limited, Income Constrained, Employed” households — found that two in five families with at least one person working still have little or no cash stashed away. That leaves them a major car repair or trip to the emergency room away from financial disaster.

“We start seeing families above the poverty line who needed help,” said Pete Nájera, president and CEO of United Way of the Plains. “But we couldn’t serve them. They didn’t qualify for anything.”

He gave the example of a family of four earning $40,000 a year. The children, but not the adults, would qualify for Medicaid with a small monthly premium. The family would be eligible for food stamps.

“You can barely live paycheck to paycheck based on current conditions,” Nájera said.

A different look at financial hardship

The United Way in New Jersey created the ALICE framework to get a better count of those who face financial hardship than the federal poverty numbers reflect.

In Sedgwick County, 13% of households lived below the federal poverty line in 2021, the latest year evaluated in the report. Another 27% were ALICE households, sometimes called the working poor.

ALICE isn’t one size fits all. Its calculations are designed to reflect real-world factors. That includes family size, children’s ages and local cost-of-living expenses.

ALICE’s calculator figures a family of two adults with two kids — one in school and one in preschool — would need to earn $57,200 in Sedgwick County to get by. In Johnson County, the most expensive county in the state, the same family would need $74,300.

The federal poverty level for a family of four was $26,500 in 2021.

Rising cost of living, stagnant wages

Like many parts of the country, Wichitans face rising housing and food prices, but wages are failing to keep up.

On average, a Wichita family could expect to pay about $100 more each month for rent in 2023 than it did in 2021, a 13% increase, according to commercial real estate agency NAI Martens.

Food prices have risen nearly 20% over that same time. For our family of four, that amounts to another $230 each month.

“We don’t have an employment problem,” said Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University. “We have a wage problem.”

Some companies are paying more and workers are getting raises — maybe even their biggest ever.

“It just doesn’t compete compared to inflation,” he said.

Who are the working poor?

ALICE workers are everywhere — behind the register, working the drive-thru and repositioning a patient.

Many of the most common jobs — cashier, cooking, stocker — require little formal training but were considered essential during the pandemic.

But a college education is no guarantee of financial security. Lower on the list, 11% of teachers don’t meet the ALICE threshold.

Hill said many people used the pandemic as a chance at upward mobility, especially if they had a college education.

College graduates during the Great Recession often had a difficult time landing white-collar jobs, Hill said, because they didn’t have work experience. So they worked retail and food service and often stayed.

As people retired during and after the pandemic, more people could use their experience, often as retail and food service managers, to move into better-paying jobs in other industries.

That shift created worker shortages in fast food and retail, raising wages there as high as $15 an hour.

The report also highlights economic disparities between race and gender.

The vast majority of ALICE households are white, but a disproportionate number of households of color face financial hardships. Sixty percent of Black households and 49% of Hispanic households fell below the ALICE threshold, compared to 36% of white households.

Single-parent households are especially vulnerable. While both genders struggled, 73% of single mothers fell below the ALICE threshold compared to 50% of single fathers. Only 15% of married-parent households fell below the threshold.

Sparking conversation

Not only are ALICE families at risk in a financial emergency, but they also face everyday health consequences — ranging from too little food to skipping doctor appointments or medications to an increased likelihood of depression or anxiety.

The report provides an overview of the economic landscape in Kansas, but Nájera said he hopes it will spark conversations and, eventually, policy change.

He said two areas where change needs to happen first are around housing and day care.

He said that as housing costs have risen, many ALICE families are spending as much as half of their income to pay rent . That’s well above the recommended 30% of income.

“No one person here is going to change rent and mortgage,” Nájera said.

He said there need to be changes in permitting and zoning and more construction of low-income housing.

Day care is a particularly thorny issue, Nájera said, because both day care providers and parents are feeling the pinch.

“The day care provider is getting 10 bucks (an hour), and they say, ‘I can’t make a living on that.’” Nájera said. “Well, if I make it $15, the parents can’t take that cost in the increase of day care because it’s already more than their mortgage.”

It’s a business problem, too, Nájera said. Business owners often have employees who have pieced together child care through relatives, friends and babysitters, making scheduling difficult or leading to more unexpected absences when child care falls through.

For employees, it can be difficult to move for a better job or promotion if they have a grandparent or other relative providing free care. The difference in pay often isn’t enough to cover the increased costs.

While there are no easy solutions, the report has sparked conversations about raising the minimum wage in other states and has led to increased tax credits for ALICE families in Hawaii .

The post Wichita families struggle to survive as the economy thrives appeared first on The Wichita Beacon .