ALICE: Asset Limited, Income Constrained, Employed

I spent a lot of time this weekend thinking about ALICE.

In 1963, President Lyndon Johnson asked an analyst, Mollie Orshansky, to develop a measure of poverty for his War on Poverty. She took the minimum calories and thus food budget necessary for a family of four and multiplied by three. That, adjusted for inflation, continues to be the federal poverty line.

My friend Stephanie Hoopes is challenging that definition. Her United Way ALICE Project   (http://www.unitedwayalice.org) looks at individuals and families that are “asset limited, income constrained, employed”, those who are working in low-wage jobs with little or no savings for an emergency. Her work shows that if we define the poverty line as the income families need to live and work in a modern economy – enough for housing, food, child care, health care, and transportation — roughly a third of the people in the ten states the ALICE Project has studied so far are at or below the poverty line.

  • New Jersey had 32% of its population at or below the ALICE poverty line before the recession; it now has 38%.
  • Massachusetts had 15% low income in 1970; 28% in 2014. This would be higher using the ALICE threshold (Boston Globe, front page, March 6, 2016)

Stephanie is sure you know someone who is ALICE: someone in your family, the person who sold you coffee this morning, the woman who took your kids from you at daycare. People who are working hard, but can’t afford basic household necessities.

Perhaps this is why Trump and Sanders are striking a cord with so many.

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