What Are ALICEs and What Do They Mean for the Economy?

The Latest Acronym to Describe this Economy

There’s a new acronym on the block to describe an aspect of the post pandemic economy: ALICE.

Who exactly is ALICE? It stands for Asset Limited, Income Constrained, Employed Americans, describing citizens who work full-time and are technically above the poverty line, but still struggle to make ends meet. In other words, these Americans are trapped in socioeconomic limbo. They make too much to qualify for certain federal government assistance, but not enough to support themselves or their families comfortably.

More ALICEs

As of 2021, nearly a third (29%) of U.S. households qualified as ALICEs, per data from nonprofit United For
ALICE , which coined the acronym. With pandemic-era assistance over, this number is set to grow, according to the nonprofit.

On top of that, a period of historically high inflation has boosted the cost of living virtually everywhere, which is hitting lower-income families much harder. For example, while wealthier households may be able to downshift from pricier products to store brands in the grocery store, this is not an option for consumers who are already buying the budget-conscious choice. Inflation for basic goods outpaced overall inflation annually from 2007 to 2023 (3.3% to 2.5%, respectively) per United For ALICE’s ALICE Essentials Inflation Index.

What To Do

This means certain Americans just above the poverty line are steadily seeing their standard of living eroded, an issue that disproportionately impacts Black and Hispanic households.

The prevalence of ALICEs in America is a reminder that a strong U.S. economy doesn’t mean an equal U.S. economy. Not all wages have risen, even though overall wages have grown, for example. The federal government may have safety nets in place, but some Americans are still falling through the cracks.

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