Meet ALICE: How the United Way is Creating a Portrait of the Working Poor in NC

Community and Economic Development – Blog by UNC School of Government

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Meet ALICE: How the United Way is Creating a Portrait of the Working Poor in NC

By Maureen Berner

Published January 15, 2019

The standard economic statistics are well-known to CED professionals: poverty rates, jobs created, unemployment rates.  We hear them on the morning news broadcasts as they are released from the Bureau of Labor Statistics or the Census Bureau.  What is less common is the more complete picture of the working poor – what does the term ‘working poor’ mean?  Who makes up the working poor in your county and how large is this population? The concept of the working poor has traditionally been relatively vague – an undefined group ‘out there,’ popular with politicians and poverty researchers.  Then ALICEappeared.

ALICE stands for the population that is Asset Limited, Income Constrained, and Employed, and the effort to measure the ALICE population is a project of the United Way.  The ALICE population represents the core concept of the working poor — those who are employed but still cannot afford basic necessities.   It is the population that makes too much to officially be in poverty (with income below the poverty line), qualify for government assistance but often make just too little to actually get by.

It is easy to put a face to this idea – as the creators describe it, these are the folks who work hard at the grocery store, the day care, the insurance office, the police station and the school, with a steady but small income – but still with little or no savings, paying bills but maybe not all the time or on time, and in danger of everything falling apart with one failing car transmission or illness. This is the population that must make choices between medicine and gas to get to work at the end of the month, let alone saving for retirement or college for the children.

To understand how large a segment of the population this is, the ALICE threshold was developed: the bare-minimum economic survival level in a county, taking into account the local cost of living.   As described by the United Way, the Household Survival Budget is an estimate of the total cost of household essentials – housing, child care, food, transportation, technology, and health care, plus taxes and a 10 percent contingency. It is calculated separately for each county in a state, and for six different household types.  The ALICE Threshold then represents the minimum income level necessary for a household to survive, based on the Survival Budget. Households below the threshold include both ALICE households (the working poor) and those living in official poverty (the poorest of the poor).

The ALICE project includes related measures such as the gap between income and public assistance and the Household Survival Budget to demonstrate the income gap between being part of the working poor and surviving. It also measures affordable housing from the ALICE, or working poor, perspective, not just from those living under the poverty line.   All these data can be helpful to the CED professional trying to educate elected officials, colleagues or the public about the underlying economic stability of the community.  The good news is that overall, things are getting better in broad economic terms.  The concern is, is economic growth reaching the ALICE population, and if not, how far do we still need to go?

ALICE has gotten attention. It has been used in news coverage from ABC News to Fox News to the Washington Post to Al Jezeera America, and well as a laundry list of local media.  It buttresses the findings of a mixed result U.S. Federal Reserve Reportshowing that about 40 percent of American adults could not afford an emergency expenditure of $400.

Of course, a blog post about ALICE would not be complete without talking about the value of the maps – yes, there are county level mapsof the ALICE population. In the case of North Carolina, it is not a surprise that it somewhat mirrors the underlying pattern of the population in poverty. What is surprising is that the North Carolina ALICE population is about double the size (28.6%) in comparison to the percent of the population in poverty (14.8%).  Together, it means more than 40 percent of North Carolinians are barely getting by.