29% of US Households Are Considered 'ALICE': What Does That Mean And Are You One?

In the United States, a term is used to refer to citizens who earn too much to qualify for government schemes but still live in poverty. These households are known as ALICE, which stands for Asset-Limited, Income-Constrained, and Employed.

ALICE households face significant challenges in affording necessary expenses such as healthcare, childcare, rent, food, gas, and clothing.

According to the U.S. Bureau of Labor Statistics, rent increased by 6.1% between January 2023 and January 2024, while car insurance went up by 20.6% and medical service costs for outpatients grew by 8.3%.

ALICE households are likely to face constant difficulties in paying their bills and often have to live pay check to pay check. To cope with these struggles, they may need to make sacrifices such as buying cheaper versions of necessary items or going without other necessities for a period.

In the United States, citizens are considered ALICE if their annual income earnings are above the Federal Poverty Level but not enough to cover their daily needs. The poverty level for a family of four is $31,200, and for an individual, it is $15,060.

According to United for ALICE, 29% of American households are currently deemed ALICE, while 13% of households have an income below the Federal Poverty Level.

The COVID-19 pandemic had a significant impact on ALICE households, as many lost their jobs or had their hours reduced. Gabriel and Cherry Galarza, a married couple from New Jersey, were among those affected.

Gabriel worked as a wedding photographer, while Cherry worked in the insurance sector. With two young children to care for, the couple relied mostly on Cherry's income to pay their bills as Gabriel's workload significantly reduced.

Cherry was unable to afford eggs for two weeks and had to rely on feeding her family peanut butter. The couple earned above the limit to receive government support and could not afford childcare.

Fortunately, the United Way's United in Care program was operating in their hometown of Warren County, and their application succeeded. This program enabled Julian and Mateo to be cared for while Gabriel and Cherry continued to work and earn.

ALICE households often face significant struggles in affording daily necessities such as food.

In the United States, a family of four must have a gross income of less than $39,000 to qualify for the Supplemental Nutrition Assistance Program (SNAP), which is a federal government program designed to help low-income individuals with their food shopping.

Americans living with disabilities can only receive support through Supplemental Security Income if they earn less than $23,562 annually.

Despite recent increases in earnings for many Americans, rising inflation rates have neutralized its effect. In addition to struggling to afford essential purchases, ALICE households are unable to indulge in certain commodities and services.

According to the Consumer Price Index, these households are less likely to spend money on restaurant meals or concert tickets.

Ultimately, while it can be considered positive that fewer Americans are living in poverty, the prevalence of ALICE households highlights a more profound issue with how the government compensates for people struggling to make ends meet in the current economic climate.