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ALICE is an acronym for a group of Americans who have limited assets and income and are employed.
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Most ALICE sufferers earn too much to qualify for government assistance, but not enough to afford everyday life in the United States.
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Their existence points to a gap in the way the United States measures who is in economic trouble.
Imagine if your job paid just enough money to avoid food stamps or disability benefits, but not enough to afford rent and health insurance. You would be an ALICE.
ALICEs (Asset Limited, Income Constrained, Employed) is a term coined by the United Way’s United For ALICE program to describe Americans who work and earn more than the federal poverty level of $31,200 for a family of four or $15,060 for an individual, but struggle to meet their basic needs.
Many ALICE workers are employees whose wages are typically not enough to pay their bills, meaning they live paycheck to paycheck. Some are forced to sacrifice rent payments for groceries or child care for doctor’s appointments.
About 29 percent of U.S. households are ALICE households, while 13 percent are below the federal poverty line, according to United For ALICE calculations based on data from the Census Bureau’s American Community Survey and United Way family living expenses estimates.
Many government initiatives have attempted to help people out of poverty. But as Stephanie Hoopes, national director of United For ALICE, told BI, the federal poverty line is in many ways outdated because it doesn’t take into account regional differences and the changing share of household spending on food. Hoopes also said less attention is paid to helping those who are financially better off but still can’t invest in their future.
By and large, poverty rates in the United States have fallen—which at first glance seems to be good news for American workers. And while these measures may reach the most financially disadvantaged Americans, the benefit cuts leave out the still-precarious group of ALICE recipients.
But the share of ALICEs has risen nationwide over the past decade, with pandemic-boom states like Montana and Idaho seeing big jumps. That’s because while many Americans’ incomes have risen, they may not have kept pace with skyrocketing inflation and housing prices.
The frequency of ALICE cases may point to an economic problem underlying a seemingly robust labor market: More and more Americans are caught between wealth and support, and policies are failing to accommodate them. This is in stark contrast to pandemic-era stimulus packages that removed eligibility for various types of aid and offered direct economic stimulus.
“It’s hard to quantify the frustration, the stress, the fact that you have to make really bad decisions day in and day out,” Hoopes said. “Are you going to get your child’s medication or make dinner tonight? Are you going to leave the electricity on? Are you going to go to daycare?”
Fewer Americans live in poverty, but more are ALICEs
For example, to qualify for SNAP, a family’s income must be below about 138 percent of the federal poverty level. That means the gross income of a family of four must be less than $39,000.
For Supplemental Security Income, which provides benefits for Americans with disabilities, the limit for individuals is typically $23,652 of annual wages. Some state-by-state benefits are often available to individuals and families earning 200% to 250% of the federal poverty level.
United For ALICE has found that inflation has hit these households even harder than the average American. The Consumer Price Index, one of the main inflation indicators in the U.S., includes many goods and services that ALICEs don’t frequently buy, such as eating out, sports equipment or concert tickets.
United For ALICE developed the ALICE Essentials Index, which more accurately reflects the survival budget of low-income households. When measuring inflation for only basic expenses, the ALICE Essentials Index has risen faster than the Consumer Price Index. At the same time, ALICEs have fallen behind in wage increases over the past 12 years.
“Some of our calculations have shown that if ALICE had fallen behind like that and just bought the same things every year, she would have had to work another full year just to be able to afford those things during that time period,” Hoopes said.
And the increase in ALICE cases is uneven.
“The impacts are disproportionately high on black and Hispanic households, on people with disabilities, on younger and older households who are more likely to be below the ALICE threshold, and on single-parent households with children compared to married parents,” Hoopes said.
In fact, many Americans are not necessarily falling into poverty, but they are increasingly on the brink of becoming ALICE victims. Hoopes said that label is gaining traction among workers.
“When we present, people come up to me afterwards and say, ‘Thank you for explaining to me why I’m having such a hard time. I thought I was the problem,'” Hoopes said. “But here there is a structural explanation, and that’s why it’s hitting people in a very real way.”
This comes as the share of Americans above the ALICE threshold has declined from 2010 to 2021 in nearly every state, except for states like Florida and Utah – both of which attracted an influx of wealthier coastal residents during pandemic migration.
The frequency of ALICE cases may be one reason why good economic data does not paint a rosy picture for Americans, and it also undermines stereotypes about who is actually in trouble in the United States.
“People have a lot of stereotypes about who that is, and it’s people who are lazy or don’t put in the effort. Our data shows that that’s the cost and that’s how the jobs pay, and most of those jobs don’t pay enough to cover the cost,” Hoopes said. “It’s a math equation and a structural problem. It’s not that people don’t put in the effort.”
Do you earn above the poverty line but still struggle to afford everyday life? Contact these reporters at [email protected] And [email protected].
Read the original article on Business Insider
