Imagine yourself as a single parent earning $15 an hour and working 40 hours a week. Your annual gross income is $31,200.
One day, your boss recognizes your work ethic and skill. She raises your pay to $17 an hour, increasing your annual income to $35,360.
That’s good, right? Maybe not.
With an annual income of $31,200, your family could qualify for up to $1,116 in assistance a month to cover child care expenses. You also could qualify for up to $1,137 in SNAP (Supplemental Nutrition Assistance Program) benefits to buy food.
When your pay rises to $35,360, though, you could lose those benefits. Your income went up $4,160 a year, but it costs you $27,036 in state and federal aid.
The most recent ALICE report says a survival budget for a family of four, with two kids in childcare, is $71,436.
That’s a real problem for nearly half the families in Bay County, Nicole Luczak, CEO and President of United Way of Bay County, told the local group of
Women in Leadership Great Lakes Bay.
Luczak was describing the
ALICE population. ALICE stands for Asset Limited, Income Constrained, Employed. It describes households earning more than the Federal Poverty Level, but less than the basic cost of living.
![]()
Photo courtesy of the United Way of Bay CountyNicole Luczak from the United Way of Bay County explains how quickly working families can find themselves in financial trouble. The United Way focuses on building partnerships to help families not earning enough to pay for the basics.In 2022 in Bay County, 19,411 households were living below the ALICE threshold. That’s nearly half of our households.
“This actually happened,” Luczak said of the scenario described at the beginning of her presentation and this article.
“This was a person that came in to us at United Way and asked for assistance because she got a $2 an hour raise with a promotion and she couldn’t pay her utility bill. She was $97 short. She had juggled everything else.”
The story illustrates how difficult it is for families in the ALICE population.
“It’s very simple to think, well, somebody just needs to get a better job,” she said.
“But when you’re trying to work your way out of that, you’re not going to jump $30,000 in one promotion. So what do you do in between? What do you do when you get a $2 raise and then a $5 raise? You still can’t make up for those benefits you lost.“
Even if you can find a second job, make the two work schedules fit together, and find reliable transportation to each, you’ll need to pay for more child care. And that’s if you can find child-care.
Studies show that there are more kids than quality child care spots in Bay County.
The
United Way of Bay County is one of the organizations trying to help ALICE families.
“Our mission is finding long-term solutions and addressing root causes of issues in our community.”
One of the issues is what’s called a “benefits cliff.” When income rises, people lose benefits, falling off a cliff.
“The federal poverty level is used to qualify for a lot of different assistance programs,” Luczak explains.
Many allow people to earn more than the federal poverty level before losing assistance. For example, SNAP is available to families earning 130% of the federal poverty level. Medicaid is available for families at 138%.
“It still doesn’t equate to what you need to survive,” she said.
Many assistance programs also cap how much families can have in savings. That makes it difficult to save for a rainy day or a down payment on a house.
To make her point clearer, Luczak asked participants to complete an activty called Making Choices.
“I’m going to put you into the shoes,” of the ALICE population, she said.
She gave each participant 15 Smartie candies and a worksheet. The worksheet had categories such as housing, transportation, child care, and food. The participants allocated their Smarties to determine a budget.
At the end, people talked about the challenges of completing the assignment and those they’ve witnessed among friends, family, and community members.
Several mentioned transportation as a major obstacle.
The bus systems in Bay, Saginaw, and Midland counties don’t cross county lines. In Bay County, the buses only run until 6 p.m.
That means you can’t take the bus to a second-shift job. It’s nearly impossible to get out of a first-shift job, collect the kids at day care, and still make it home before the buses stop running. Forget a quick stop at the grocery store after work.
“You can’t get anywhere in the evenings. And you certainly can’t get from county to county,” Luczak said.
Luczak also busted any myths about how difficult it is to drop into the ALICE population. She reminded participants about how many people were out of work in 2020 when the COVID-19 pandemic closed businesses for weeks.
“There’s no them and us,” she says. “It can literally happen to anybody with one emergency. We had a Dow exec who ended up in the food distribution lines when his wife ended up with cancer. “
She’s seen long-time United Way donors retire and discover themselves facing financial hardship. She’s had family members with good-paying jobs struggle to pay the bills after a divorce.
“I could give you stories for days about situations where it’s not their bad choices that put them in that situation. It literally can happen to anybody.”
The solution is as complex as the problem, she said.
“There’s always the answer of ‘We’re the United Way, so give, advocate, volunteer,” she said.
She also encouraged people to do more of a personal level too.
For example, how many employers line up the start of the work day with the start of the school day? Shifting the time work starts might mean employees don’t need childcare in the morning.
“There’s a lot of things you can do to really help those employees,” she said.
She asked people to speak out when they hear others spreading myths about people not working hard enough.
“Make sure people understand, de-myth things, reduce the stigma,” she said.