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Over 50 million US families can't afford basics like rent and food: Study

Bill, who is a military veteran and now homeless, walks through an economically stressed section of Worcester, Massachusetts, on March 20, 2018. (AFP photo)

More than 50 million households in the United States don't earn enough to pay for basic expenses, including housing, food, health care, transportation and a mobile phone, according to a new study.

Combined, these 50.8 million households make up 43 percent of America's 119 million households, according to the data released by the United Way ALICE Project.

This calculation includes the 16.1 million households in poverty as well as another 34.7 million families called ALICE, which stands for Asset Limited, Income Constrained, Employed.

The so-called ALICE households earn above the US government’s official poverty level, but less than what it takes to survive in the modern economy, the study found.

"Despite seemingly positive economic signs, the ALICE data shows that financial hardship is still a pervasive problem," said Stephanie Hoopes, the project's director.

"This research dispels long-standing myths about financial instability by showing that ALICE families exist in every community and among all ages, races and ethnicities," Hoopes added.

The states of California, Hawaii and New Mexico have the largest share of struggling families, at 49 percent each.

Many of these individuals work low-paying jobs and have little savings the study noted. Some 66 percent of jobs in the US pay less than $20 an hour.

The widespread problem is occurring even as America’s unemployment rate in April was the lowest since 2000.

"For too long, the magnitude of financial instability in this country has been understated and obscured by misleading averages and outdated poverty calculations," said John Franklin, CEO of United Way of Northern New Jersey.

"It is morally unacceptable and economically unsustainable for our country to have so many hardworking families living paycheck to paycheck. We are all paying a price when ALICE families can't pay the bills," he said.

The findings come as a report highlights the massive pay gap between the US CEOs and average workers.

The study, published on Wednesday by Minnesota’s Democratic US congressman Keith Ellison, found that the average CEO-to-worker pay ratio has now reached 339 to 1, with the highest gap approaching 5,000 to 1.

The study also shows how some of the most extreme disparities in CEO-to-worker pay exist in industries whose workers earn low wages, such as fast food and retail, with a 977 to 1 disparity, one of the widest gaps.

“Now we know why CEOs didn’t want this data released,” says Ellison, who championed the implementation of the pay ratio disclosure rule as it was written into the Dodd-Frank financial reform bill of 2010. “I knew inequality was a great problem in our society but I didn’t understand quite how extreme it was.”


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