Amidst a national conversation about income inequality, ALICE continues to struggle, often unheard.

Coined in 2009 by United Way of Northern New Jersey, the term ALICE (Asset Limited, Income Constrained, Employed) describes those Americans who live above the Federal Poverty Level (FPL) yet still find it difficult to make ends meet.

New research in Connecticut and other states reveals the hardships faced by millions of these Americans and suggests that in order to address economic instability in our communities, we must focus on the needs of ALICE.


Studies conducted by United Way organizations in six states, including Connecticut, indicate that families and individuals with ALICE status comprise a significant percentage of the nation’s households. The ALICE income threshold is defined by United Way as a “survival budget,” with just enough funds to pay for “bare-minimum” basic needs — but leaving no change for additional spending, entertainment, or savings.

This threshold varies by county in each of the six states in which the study was conducted to account for specific costs of living. Households with ALICE status are those that earn below the survival budget but above the poverty level, which is set at $11,170 a year for a single person and $23,050 a year for a family of four as of 2012 for the continental United States.

To compare, the average ALICE threshold for Connecticut households is $21,944 for a single person and $64,689 for a family of four. In Indiana, which has a much lower cost of living than Connecticut, there is still a large margin between the ALICE threshold — $17,026 for a single person and $46,495 for a four-person family and the federal poverty level.


Government programs — including TANF (formerly known as AFDC  — Aid to Families with Dependent Children), SNAP (formerly called food stamps), and subsidized housing and childcare — provide basic resources to many families in need. However, most forms of government aid are allocated based on household income so that only households earning below a certain threshold are eligible for benefits. Many ALICE households earn too much to receive government aid but too little to afford sufficient supplies, leaving them just enough to struggle through bill payments.

Funds-strapped government programs are especially inadequate at providing for ALICE families with children. For example, the Office of Head Start, which offers free, quality daycare and preschool to children, requires that family income be at or below the FPL for eligibility. This threshold excludes all ALICE families.

Care4Kids, a subsidized childcare program, has a qualifying income level of $52,107 for a family of four — a significantly higher threshold than Head Start’s, but still too low to include all ALICE households. As a result, many ALICE families are left to foot the expensive childcare bill themselves (at bare-minimum, $9,000 annually for a four-year old child in Connecticut).

The Supplemental Nutrition Assistance Program provides food stamps to low-income households. In 2012 in Connecticut, benefits were available, for example, to single adults who earn less than $20,664 a year or to families of four earning less than $42,643 annually. Comparisons of the ALICE and SNAP income thresholds suggest a wide supply gap: while virtually all single ALICE adults could apply for SNAP benefits, many 4-person ALICE households would be turned away for earning too much. Yet the annual food budget — at bare-minimum $7,100 dollars for a family of four with two young children living in Connecticut — is a cost that many cannot afford.

Alice chart 1
Claude Albert /

Findings from DataHaven’s 2012 Community Wellbeing Survey — cited throughout the Connecticut ALICE report — offer a close-up view of the lives of ALICE families, identifying the specific difficulties of ALICE status and revealing factors contributing to the rising number of ALICE individuals. Mark Abraham, DataHaven’s executive director, served on the ALICE Research Advisory Council for the United Way of Connecticut.

The 2012 survey, which focused on the Greater New Haven metropolitan region, was the foundation for the much-expanded, ongoing 2015 Community Wellbeing Survey. Pooling a sample of over 16,000 adults, the survey will allow DataHaven and its over 100 partner organizations to evaluate economic stability, well-being, and other factors in every community in the state. The second survey will also track trends in the Greater New Haven region from 2012 to 2015.

Greater New Haven encompasses the City of New Haven, in which 58 percent of households are living at or below the ALICE threshold compared to the Connecticut statewide figure of 35 percent. The Greater New Haven region, which is demographically similar to Connecticut as a whole, can be examined as a case study to analyze the conditions of ALICE families in similar urban areas throughout the United States.

Alice chart 2
Claude Albert /

When asked how they were managing financially, 41 percent of respondents in the region and 52 percent of respondents in the City of New Haven said they were “just getting by,” “finding it difficult,” or “finding it very difficult.” Additionally, 20 percent of residents in the region and 31 percent of residents in the City of New Haven said that there were times in the past 12 months when they did not have enough money to buy food. The survey results confirm that families across the region encounter the difficulties associated with ALICE status — many more than the federal poverty level would indicate.

According to the United Way, there are several consequences of ALICE status, including financial instability. ALICE adults are often forced to use short-term strategies for survival instead of thinking about their health and well-being in the long run. For example, ALICE parents may place their children in the care of inexperienced relatives or neighbors instead of an accredited childcare facility to save money, which may not meet the child’s health or education needs.

The survival budget — which requires living paycheck to paycheck and does not allow for savings — leaves ALICE families especially vulnerable to financial crises. For example, ALICE adults may forego preventive health care or home or automobile insurance to make ends meet. Without these safeguarding measures, a health emergency, car accident, or home accident may incur unpayable bills that otherwise could have been minimized or even avoided.

Indeed, DataHaven reported that 31 percent of all Greater New Haven adults — including 38 percent of those with children living at home — had fallen behind on bill payments in the past year. Nearly 40 percent of adults with incomes of less than $50,000 had postponed medical treatment at some point in the past year due to its cost.

Alice chart 3

An additional measure of a family’s vulnerability to financial crises is their assets and savings — often measured in terms of how long a person would be able to sustain their current lifestyle if their source of income was taken away. Fifty-two percent of respondents to DataHaven’s survey said they would not be able to maintain their current standard of living for more than six months. One in three adults across the region said they could maintain their lifestyles for less than two months, indicating that they are saving very little or no income.


According to recent studies, many characteristics of ALICE status are linked to race, including being employed yet living on a very low budget. Compared to 7 percent of white and Asian workers, about 18 percent of black workers and 21 percent of employed Hispanic people are poor, found a study from Louisiana State University.

Financial vulnerability often results from low household wealth, or median net worth. The Pew Research Center found that, as of 2013, the median net worth of white households was $141,900, while that of black households was $11,000 and that of Hispanic households was $13,700. In addition, from 2010 to 2013, the median net worth of white families increased, while the net worths of both black and Hispanic families fell over time.

A recent report published by the American Civil Liberties Union found that the housing crisis and ensuing recession had a disproportionately harmful impact on black families, resulting in large declines in their household wealth compared to white families. The study reported that from 1999 to 2011, white households experienced a 5 percent decline in household wealth, while black households saw a 40 percent drop over the same period. From 2009 to 2011, white households saw a 17 percent rise in wealth, while black households saw a 17 percent decrease.

In Greater New Haven, DataHaven’s 2012 survey results showed that financial vulnerability was more prevalent in minority households. While 31 percent of all respondents said they had fallen behind on bill payments, 48 percent of blacks and 43 percent of Hispanics said that they had.  A new study found that both wealth and poverty are highly concentrated in neighborhoods that are racially segregated from each other — even more so in Connecticut than in other metropolitan areas — indicating that the divisions in financial security along racial lines may have major long-term impacts on neighborhood development and on public affairs more broadly.


Understanding the issues that ALICE households face at the neighborhood level — as DataHaven’s research is allowing — is a critical step forward.

Policies and programs that improve the financial security of working families, like tax credits, transportation and affordable housing, are often dependent upon local political mobilization.  Furthermore, research into residents’ well-being allow policymakers to understand and address the everyday hardships faced by ALICE households in a way that Census statistics may not.

With the number of ALICE households growing and government and nonprofit aid program unable to meet the full need of financially insecure families, the corporate sector may become an increasingly important partner. In addition to influencing state policy, major corporations can create good-paying jobs that lift adults above the ALICE threshold, and they often give to nonprofits that assist ALICE families in other ways, United Way leaders wrote in a recent article published in the Connecticut Mirror.

“Substantive solutions to the challenges of ALICE families and other critical issues will not be found in the demonization of business, government or any other stakeholder,” they said. They will be found “only when business, government and nonprofits commit to working together.”

Erica Pandey is a summer fellow and Mary Buchanan is a project manager at DataHaven, a formal partner of the National Neighborhood Indicators Partnership with a 25-year history of public service to Greater New Haven and Connecticut. DataHaven’s mission is to improve quality of life by compiling, sharing and interpreting public data for effective decision making.

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