Employed and struggling: Why many working Frederick County families cannot afford basic needs

Sept. 16--A statewide report released this past week presented a dire picture for residents across the state: A growing number of income-earning households cannot pay for their basic needs.

Frederick County is no exception.

More than 35,000 households in Frederick County cannot afford the most basic costs of housing, food, transportation, child care and health care. United Way'sAsset Limited, Income Constrained, Employed (ALICE) report compares a survival budget for each county with household incomes to determine the percentage of people below the ALICE line. In 2018, 39 percent of the 89,800 households in the county fit the ALICE description, a five percentage-point increase from 2014.

No single factor is behind the uptick in struggling residents, local leaders said. However, rising prices for housing, child care and transportation are affecting community members in outsized ways and forcing them to make tough decisions about how they spend their dollars.

These are decisions about whether to pay the electricity or the water bill. Or deciding to stop taking a heart medication because filling the prescription means a child starts school without a new pair of shoes. And, without savings, an unexpected car repair or trip to the emergency room can be disastrous.

The state of Frederick

The ALICE report stands in stark contrast to recent announcements about positive national and local economic indicators. According to data released Wednesday by the U.S. Census Bureau, the real median income of U.S. households increased by 1.8 percent between 2016 and 2017, while the poverty rate fell for the third straight year. The national unemployment rate is at a 10-year low.

In the county, the median household and per capita income is above the state average, according to the Frederick County Office of Economic Development. The ALICE report provides a more nuanced picture of who is struggling in local communities, said Stephanie Hoopes, lead researcher and director of the ALICE report.

"We have a lot of good things happening," Hoopes said about the national economy. "And yet, we are one of the few measures that's showing that good economic news is not reaching all households."

Across Maryland, 38 percent of households -- a total of 825,433 -- are below the ALICE line. The majority of jobs in the state offer a low wage, with half paying less than $20 an hour.

In 2018, Maryland's minimum wage increased to $10.10 an hour -- a rate that does not meet the necessary income in the county for a single adult, assuming the person can get 40 hours a week at the job, which few of those positions provide.

In Frederick County, a single adult must make $35,316 a year, or $17.66 an hour, to cover basic costs and be above the ALICE line. For a single adult with a school-aged child, the number increases to $51,852 a year, or $25.93 an hour. A two-adult home with two children needs to make $84,036 a year, or $42.02 an hour. In the two years since the last ALICE report figures, the monthly budget for a family of four increased by 11 percent for a total of $8,300 over the course of a year.

The budget represents the bare minimum to live and work in the modern economy, Hoopes said. For transportation, it means having a car without having car payments or any savings for repairs. For housing, the proposed $1,623 a month for a family of four would rent a two-bedroom home.

A home you cannot afford

As the population of Frederick County residents continues to increase, the gap between supply and demand grows. The county needed more than 11,000 units to make up for the shortage in 2014 and that gap has only grown, members of the Affordable Housing Council said.

"The problem of trying to develop enough affordable housing to meet the demand in the county has always been a problem," said Hugh Gordon, association executive of the Frederick County Association of Realtors. "As [the cost of] housing goes up, and it becomes a larger part of your income, that's only going to make it worse."

The median cost of a home in Frederick in 2017 was $334,100, according to data from the U.S. Census. The ALICE budget for households with two adults and two children increased by $1,848 a year for housing from 2016 to 2018 -- and that is to afford the most basic housing.

The latest report provides insight into the kinds of families who are struggling. Dual-income households provide more flexibility for each person's income to stay above the ALICE line. Nearly three-quarters of single-mother homes in the county -- 3,293 total households -- do not make enough money to cover basic costs. For single-father homes, 55 percent -- 1,636 households -- are below the ALICE line.

The high rate of single-mother households under ALICE underlines the local gender wage gap. According to Data USA, full-time male employees in the county make 1.29 times more than their female counterparts. For the average salary, a difference of more than $17,300 a year.

Ron Cramer, executive director of Habitat for Humanity of Frederick County, said single-female households are the largest group of residents in need of the organization's services. The increasing demand for housing spurred the organization to change its model. Instead of building a home for a local family each year, Habitat for Humanity of Frederick County will start constructing only multi-family buildings -- such as town houses or duplexes -- or repurposing buildings in the summer of 2019.

"[The shortage] deeply worries me," Cramer said. "We know we have to increase the number of affordable housing units we're providing each year."

Poor-quality housing and housing instability has real effects on a person's health, such as an increased risk of sickness because of crowded housing units. The stress of paying for expensive housing or experiencing an unstable housing situation can lead to declines in a person's mental health. People could be forced out of the area if changes are not made to the affordable housing supply, Gordon said.

"The only potential answer, if you want to find a home, is to move to other locations where housing may not be quite as expensive," he said.

A car means opportunity

People working in Washington, D.C., Baltimore and even Frederick can save on housing by moving to more affordable areas. In Frederick County, that means moving farther west. But the dollars saved on rent or mortgage payments come with the cost of higher transportation costs.

Transportation is the second-highest cost for American households, behind housing, according to the Bureau of Transportation Statistics. Having a car ensures people can travel where public transit does not go, which becomes especially important for finding and holding a job. Rick Trawick, founder of Second Chances Garage, said owning a car is critical in Frederick County.

"To get and keep a decent job, you have to have your own vehicle," he said.

According to a report from the Urban Land Institute, almost 60 percent of Frederick County households have a high cost burden for transportation and 92 percent of county residents working in D.C. commute by car. Even simple fluctuations in gas prices can stress budgets. So far, average local gas prices are 41 cents more a gallon than at this time last year, according to AAA.

The ALICE transportation budget does include costs of gas, oil and basic maintenance but not any money for major repairs. The price of auto shop labor in the area is typically more than $100 an hour, in addition to paying for parts.

Second Chances Garage offers repair services at $50 an hour for residents who fit the ALICE description. When a family has to make a decision between a scheduled oil change and an immediate need -- such as buying groceries -- car repairs get ignored, Trawick said.

"When that happens, the car eventually dies and they're left without transportation. Then they're in an even more critical situation."

The costs of children

Federal guidelines state families are "cost burdened" by child care costs if they spend more than 10 percent of their budget on care. In Frederick County, families are paying 20 percent, or $20,436 a year for two children, according to a 2017 report from the Maryland Family Network.

The average Frederick County family has three children, according to census data.

"It costs a lot of money to offer quality child care, and Maryland has some of the highest standards in the United States," said Shannon Aleshire, CEO of the Mental Health Association of Frederick County.

Maryland requires a caregiver-to-toddler ratio of 1 to 3, while federal guidelines allow for ratios up to 1 to 4.

The high costs of care forces families to cobble together different types of care, such as using child care centers part time and relying on family members to help the rest of the time. Parents change their work schedules to be home more. Some even take a different job that pays less to be more flexible for their children, Aleshire said.

"Families get resourceful when it comes to [child care]," she said. "Then, there are other families who have to sacrifice and put their children in situations that are not the best for them."

Families sometimes place children in child care centers based solely on cost rather than quality, Aleshire said. Or children are left home alone at a younger age.

More families are now eligible for the state's Child Care Subsidy Program after the maximum eligible income levels were doubled in August. A family of four with an income of up to $71,525 now qualifies for financial assistance. Aleshire said she hopes more families learn about the program and take advantage of available help.

The burden on Frederick

More residents straining to cover their basic needs can increase pressure on communities. Tough decisions about how to spend a limited amount of money will hurt residents in the short-term, such as missed meals, health risks or missing time with children.

The constraints hurt area residents in the long term, too. Retirement funds will be small, if they exist at all. The next generation may not be able to pursue extracurricular activities or attend college.

Across the county, Emmitsburg, Sabillasville, Libertytown and Thurmont had the highest percentages of ALICE households. Urbana and Adamstown had the lowest. Frederick is ranked 13th in Maryland's 24 counties (including the city of Baltimore) by the lowest percentage of ALICE households, falling six spots from its ranking in 2014.

As the ALICE population grows, local nonprofits and social services will be forced to fill the gap between what residents need and what they can afford.

The release of the ALICE report coincides with the start of the Unity Campaign, a 12-day annual fundraising effort for 31 local nonprofits. The United Way of Frederick County is coordinating the effort, which last year raised $447,074. As of Friday morning, the campaign had raised $224,000 of its $475,000 goal.

Continue following The Frederick News-Post for coverage on how local organizations are adapting to the growing population of residents in need. If you would like to share your story, please contact Wyatt Massey at wmassey@newspost.com.

Follow Wyatt Massey on Twitter: @News4Mass.

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