As the 2026 midterm elections approach, affordability is dominating the conversation. Across the political spectrum, voters are keeping the cost of living top of mind as they head to the polls. Rising costs for housing, groceries, transportation, healthcare, and other essentials have made everyday life increasingly unaffordable. Polling by The Guardian shows widespread economic pessimism, with many Americans naming living expenses as one of the country’s most important issues.
For voters, the midterms represent a chance to influence policy. Yet debates about affordability often focus on the cost of individual goods and services rather than the systems used to identify and support households in need. If so many Americans struggle to make ends meet, how do governments determine who needs help?
How the Government Measures Need
The federal poverty guidelines serve as a benchmark for many public assistance programs. Derived from federal poverty thresholds, this guideline indicates the minimum annual income needed to cover basic necessities. The U.S. Department of Health and Human Services uses this measure to determine eligibility for services such as Medicaid, SNAP, and other forms of assistance.
For decades, poverty rates have served as one of the nation’s primary indicators of economic well-being. The national poverty rate has declined significantly over time, reaching historically low levels in recent estimates. Yet affordability has emerged as a defining issue of this election cycle.
How can both be true?
The Affordability Gap
The answer lies in a growing gap between how hardship is measured and how it is experienced. While about 13% of Americans live below the federal poverty line, the Urban Institute’s affordability tracker finds that nearly half of American families lack enough resources to cover essential expenses and live securely in their communities.
Only a relatively small share of Americans are officially classified as poor, yet an increasing number of families report struggling with housing costs, healthcare bills, transportation expenses, childcare, and groceries. Understanding that gap requires looking beyond poverty alone.
Enter ALICE
Researchers at United For ALICE developed the concept of ALICE households to explain this gap.
ALICE stands for Asset-Limited, Income-Constrained, Employed.
These households earn too much to be considered poor under federal definitions, but still don’t earn enough to cover basic living costs. They are working, often full-time, yet remain financially vulnerable. Unlike the federal poverty measure, which applies a national standard, the ALICE framework estimates what it actually costs to live and work in each county. The framework calculates a Household Survival Budget that incorporates key expenses such as:
- Housing
- Childcare
- Food
- Transportation
- Healthcare
- Technology
- Taxes
- A small contingency fund
By accounting for local costs and household composition, the framework estimates what a family needs to earn to meet basic needs where they live. Nationally, about 29% of households fall into the ALICE category, roughly 38 million families above the poverty line but still struggling to make ends meet. Combined with the 13% of households living below the poverty line, 42% of U.S. households live below the ALICE threshold, or 55 million households nationwide.
Many workers in occupations central to community life earn incomes below the Household Survival Budget. This may be a teacher in a local classroom, a cook preparing meals, a janitor maintaining facilities, or a clerk keeping the office running. For example, 2023 data showed the median child care worker earned about $22,250 less than the Household Survival Budget for one adult and one child, and workers across other essential occupations face similar shortfalls. ALICE households do labor communities depend on every day, but many find full-time employment no longer guarantees financial stability.
Why This Matters
The growth of ALICE households has important implications for policymakers, nonprofits, and community organizations.
Take Lois Napper, for example, a working mom who recently got a promotion. While this may seem like an improvement, the pay increase pushed her family above SNAP eligibility thresholds, leaving them struggling to make ends meet with the added cost of food. Her family was no longer considered eligible for assistance, but that did not mean they had achieved financial stability.
This phenomenon is known as the benefits cliff, where a small increase in income can reduce or eliminate public benefits. This leaves some households no better off financially, even when they earn more. Research shows that when lost benefits exceed wage increases, workers may delay pursuing raises, reduce their hours, or decline promotions. While these decisions protect eligibility in the short term, the benefits cliff slows progress toward long-term economic mobility.
The benefits cliff shows how eligibility thresholds and financial stability don’t always align. If eligibility systems rely too heavily on poverty guidelines, they overlook a growing population of households experiencing significant economic strain.
For local governments, this can lead to underestimating how many residents need support. For funders and nonprofit organizations, this can lead to programs that don’t fully account for the financial realities of working households. For families, it means falling into a gap between self-sufficiency and the social safety net.
Looking Beyond Poverty
The ALICE framework provides language to identify a population many Americans recognize, but public policy continues to overlook. Across the country, organizations are using the ALICE framework to better understand and respond to this challenge. Researchers are interviewing ALICE households to better understand how financial vulnerability shapes decisions. Community organizations have developed resource hubs that connect ALICE households to local programs and services, while policy toolkits help leaders use ALICE data to inform reforms to housing, workforce, and benefits cliffs. More and more, tools exist to identify, measure, and support ALICE households nationwide. The next step is integrating those tools into policy decisions, resource allocation, and program design.
By identifying households that earn above the poverty line but still struggle to afford basic needs, the ALICE framework redefines how we understand the affordability crisis facing Americans. As rising costs continue to shape the political conversation ahead of the midterms, voters should ask candidates how they plan to support the millions of households living between poverty and financial security.
Written by Jade Young (Class of ’27)