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Report Finds 37 Percent Of Iowans Can't Afford Basics

More than a third of Iowans across 457,223 households can’t afford basic expenses like housing and transportation, according to a new report from the United Way. In spite of economic recoveries since the Great Recession, many Iowans' wages aren't keeping up with the cost of living.

Michelle Sonderleiter is a single mom trying to support her five daughters age three to 18 on $12.00 an hour. She typically works 40 hours a week at a hotel in Des Moines, sometimes fewer hours if business is slow. Even working a full-time job, there's not much left at the end of the month, she said.

"On average I have $100 left out of the month that I have to divide up between the four weeks for anything that we may need," Sonderleiter said.

Sonderleiter falls into a category United Way describes as asset limited, income constrained and employed, or ALICE. These workers and households make too much to qualify for many public assistance programs or government subsidies, but are still struggling to afford basic needs like housing, food, healthcare, childcare, transportation and personal technology. And their numbers are growing in Iowa, according to a survey the United Way released Tuesday.

United Way of Muscatine Executive Director Shane Orr helped oversee the study, and said this trend is affecting the entire state.

"ALICE is the hard worker who waits on our table, fixes our car, checks us out at the grocery store, and cares for our elderly and young. ALICE is your friend, your coworker, your neighbor," Orr said.

According to the analysis, the average Iowan must make $9.78 an hour to support themselves, and $28.39 an hour to support a family of four. The state's minimum wage is currently $7.25 an hour.

Wages and cost of living vary across Iowa's 99 counties, and demographic factors like race, age, gender and sexual orientation can also have an impact on financial stability, the study found. Per capita, the analysis found Plymouth County had the lowest proportion of households living below the ALICE threshold at 26% and Decatur had the highest at 52%.

"On average I have $100 left out of the month that I have to divide up between the four weeks for anything that we may need." - Michelle Sonderleiter, a single mom making $12.00 an hour

The study authors point to low wages as a contributing factor to financial hardship, along with the increasing cost of healthcare, childcare and a growing need for internet connectivity and smartphones. They also cite underemployment, fewer available shift hours, the loss of benefitted positions, and the economy's shift towards "gig" employment.

Stephanie Hoopes was the lead researcher for the ALICE report.

"Even as wages tick up, hours are shifting. So especially for hourly paid workers, their take-home pay is more and more fluctuating, week to week, month to month, making paying those regular bills difficult," Hoopes said.

"It also helps us break the stereotype that only people below the poverty line are struggling." - Shane Orr, United Way of Muscatine

Orr said many ALICE households trying to stretch their paychecks farther are facing difficult decisions.

“Choices like do I put child in the highest quality childcare program or do I look for another alternative which may not be the best? Do I buy medicine or groceries with the money I have left? Do I fix my car to go to work or pay my rent to keep my housing?” Orr asked.

The study authors said no one policy will make up for low wages and fewer shifts. But Orr said he hopes the data will help officials get a better understanding of Iowans' financial struggles.

"It also helps us break the stereotype that only people below the poverty line are struggling," Orr said. "It's not people that just don't want to work. It's people that are working hard trying to make the best of their lives every day."

Kate Payne was an Iowa City-based Reporter