It’s probably not a common term, but just about everybody in our community and state knows ALICE.
ALICE is an acronym used by the U.S. Department of Labor to describe a socio-economic condition. It stands for Asset Limited, Income Constrained, Employed.
Basically, ALICE is working people whose incomes make it difficult for them to make ends meet. These are not idlers or free-spenders. They’re just having a tough go of it.
Chances are, if you haven’t been ALICE, you may have been. If not, you are likely to interact with ALICE every day.
According to a report listed in August, half of all Mississippians are ALICE, yet most of those who are (31 percent) are not eligible for federal funds that are limited to those below the federal poverty level (FPR).
The report is part of the data the Senate Labor Committee, which is holding hearings on raising the federal minimum wage of $7.25. Mississippi is one of five states that does not have its own minimum wage, relying on the federal minimum wage instead. Of the 45 states who do have their own minimum wage, 30 have rates that exceed the federal minimum wage.
A common argument we hear in Mississippi against raising the minimum wage is that our state’s low cost of living makes a higher minimum wage unnecessary.
The facts detailed in the ALICE report are a powerful rebuttal to that argument.
Based on Mississippi costs, the basic household survival budget accounts for housing, child care, food, transportation, healthcare, technology, miscellaneous expenses and taxes at the least expensive rates.
To afford those necessities, a single Mississippi adult would need to earn $10.96 per hour. For a family of four with two working adults, the combined hourly wage needed to cover those costs would be $27.99, essentially $14 per hour per adult.
In a state that consistently has the highest per-capita percentage of minimum wage earners, ALICE is everywhere.
The other argument against raising the federal minimum wage is that a significant increase in the federal minimum wage would wreck the economy through higher inflation and increased unemployment.
If that were true, we would have seen it already. Remember, 60 percent of the states already have minimum wages that exceed the federal minimum wage.
On the other hand, an increase in the federal minimum wage would pump money directly back into the economy across a broad range of goods and services.
It seems obvious that an increase in the minimum wage is long overdue. After all, the last bump in the federal minimum wage occurred in 2009. This is the longest period of time this nation has gone without an increase.
Based on this report, a target minimum wage for Mississippi seems to be at least $11 per hour.
That half of our state is ALICE isn’t something to be ignored. It has real consequences. No economy where half of its residents struggle just to make ends meet is a healthy economy. Bad for business? People with zero disposable income. That’s what’s bad for business.
Bumping the minimum wage significantly is certain to be a shock to the system. There’s no denying that. But it need not have been that way. We should have been increasing the minimum wage incrementally each year for the past 10 years, which would have allowed employers an opportunity to absorb the costs more easily.
But we are where we are.
Imagine the purchasing power of all those people who, through an increase in the minimum wage, would escape ALICE status.
When people can afford the basic necessities of life, it’s good for our society and good for business, too.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.