ORLANDO, Fla. – Meet ALICE.
ALICE is not “a” woman or “a” man, but could be. ALICE really isn’t old or young, but could be. ALICE is a lot of people you probably already know... in fact, you could be ALICE and not even realize it – at least not until now.
OK, enough with the mystery and the wordplay.
ALICE is an acronym describing households that are Asset Limited, Income Constrained, Employed. It is a framework developed and used by the United Way and its partners to describe both single people and families who earn wages above the federal poverty line, but cannot afford a bare-bones survival budget. The first ALICE study was done by the United Way of Northern New Jersey in 2012.
ALICE households are working, yet the official “poverty line” says they’re fine.
Who are these folks? They are working adults: cashiers, home health aides, delivery drivers, early-career teachers, and others who keep communities running yet regularly struggle to pay rent, keep the lights on, and cover basic costs. ALICE households live paycheck to paycheck, often work more than one job, and consistently face too many bills and not enough income to cover them all.
People who fall into ALICE build their monthly budgets on a tightrope, less to thrive and more to survive. The basics come first: food, communication, and in many cases, essentials for their children. Next come needs that matter but often fall into the “past due” pile when unexpected expenses arise: housing, utilities, transportation, insurance, healthcare, and yes, taxes. Entertainment exists when it can but is usually far down on the list of priorities.
ALICE households are caught in the middle: they make barely enough to pay their bills but too much to qualify as poor. And savings – not happening.
The Federal Poverty Level (FPL) is based on “poverty thresholds” calculated by the U.S. Census Bureau. The U.S. Department of Health and Human Services (HHS) issues annual “poverty guidelines” derived from those thresholds to decide who is officially counted as living in poverty for many assistance programs.
Here are the HHS FPL income numbers for 2025:
Family Size 2025 Income
Individual $15,650
Family of 2 $21,150
Family of 3 $26,650
Family of 4 $32,150
A recent online essay has gained widespread attention and makes a solid argument the government has lost its way in calculating what should or shouldn’t be considered living in poverty.
In late November, Michael Green, the Chief Strategist and Portfolio Manager for Simplify Asset Management, argued in a Substack post that the threshold set by the HHS for the official U.S. poverty line relies on an outdated formula. Green said the poverty line calculation severely understates what it takes for a family to survive, not just live comfortably. Using updated spending patterns, he pointed out that rather than $32,000 for a family of four as a benchmark for living in poverty, the realistic amount is between $130,000–$150,000 of income.
Wow. In other words, a family the federal government officially considers four times above the poverty line could instead still be in what Green calls a “crisis zone.”
In his piece, Green argues that his numbers aren’t a comfort target – they are instead an updated version of Mollie Orshansky’s “too little” crisis line for a family of four. Orshansky, who was an economist at the Social Security Administration in the 1960s, created the poverty line formula based on multiplying a minimum food budget by three. The problem: in the 1960s, food was about one‑third of household spending and other essentials like housing, healthcare, college, and childcare were much cheaper or largely covered.
Fast-forward to today: even though “food at home” costs more in dollars, its share of the household budget has fallen to roughly 5–7%, while housing, healthcare, childcare, transportation, and communication costs have exploded. Back in the 1960s, childcare wasn’t an issue as most families were one-income homes with a parent staying at home.
So, where do we stand now? When applying the same logic as the 1960s calculations, the multiplier jumps dramatically, leading to a much higher poverty threshold. Once taxes and modern essentials are counted, Green estimates a two‑income family of four needs at minimum $136,500 just to break even, with childcare alone costing about $32,773 a year.
And then there’s this: Green argues that families earning around $60,000–$100,000 can end up effectively worse off than those below the official poverty line because each raise triggers steep losses of healthcare, childcare, and food benefits.
Green’s thinking, though eye-opening, is hardly the first time someone has taken a hard look at the FPL and concluded the concept needs a significant overhaul.
While Green’s calculations are provocative, they land in the middle of a longer-running debate in Washington about whether the poverty benchmark itself needs to be rebuilt.
In 2023, California Representative Kevin Mullin (D) introduced a bill to raise the FPL by tying it to real-world living costs. Specifically targeting the Community Services Block Grant Act, Mullin wanted poverty thresholds to take into consideration modern-day expenses (the aforementioned childcare, health care, housing, etc.). An overhaul of the FPL was important to Mullin: his 15th congressional district sits in San Mateo County, including the southern part of San Francisco. San Mateo is one of the most expensive regions in the country. Coincidentally, an article from Silicon Valley realtor Lisa Lum said to live comfortably in San Mateo, experts estimated an individual should make $134,803.
Mullin’s bill, H.R. 6639 – Poverty Line Act of 2023, did not pass; it was reintroduced as H.R. 1428 – Poverty Line Act of 2025 and has been referred to House committees for consideration.
While HHS issues the guidelines for poverty thresholds, the U.S. Census Bureau is the agency in charge of measuring poverty statistically.
Poverty is measured using two metrics: OPM (Official Poverty Measure) and SPM (Supplemental Poverty Measure). As mentioned, the OPM is the traditional standard, based on a 1960s formula that compares a family’s pre-tax cash income to a threshold set at three times the cost of a minimum food diet, with only modest adjustments for family size and inflation.
The SPM, by contrast, was created as a research measure to provide a fuller picture of economic hardship by incorporating the value of noncash government benefits (like food stamps and housing subsidies), subtracting essential expenses such as taxes, childcare, and medical costs, and adjusting for differences in living costs by location.
While the SPM offers a more nuanced picture than the traditional OPM conclusion, it still falls short of fully capturing the pressures ALICE budgets document at the local level. The result is a growing disconnect between the statistics used in Washington and the grocery lists, rent bills, and daycare invoices confronting families across the country.
In closing, let’s look at ALICE for the state of Florida and some local comparisons. According to the 2025 ALICE Report for Florida, the average ALICE Household Survival Budget for a family of four in the Sunshine State (with both children in daycare) is $86,688 annually. But that’s just an average:
County 2025 ALICE Survival Budget
Brevard $94,644
Flagler $92,604
Lake $95,316
Marion $86,268
Orange $99,432
Osceola $97,080
Polk $91,152
Seminole $102,216
Sumter $85,980
Volusia $90,948
So, what have we learned?
Having a job is no longer a guarantee of financial security. The FPL is an unrealistic measure of poverty, relying on outdated metrics created more than 60 years ago. As more families fall into ALICE territory, earning too much to be counted as poor yet unable to meet basic needs, what is the real definition of living in poverty in America today?