MONTGOMERY, Ala — Nearly half of Alabama households are unable to afford basic necessities, according to the first statewide ALICE Report released by United Way. The report, which stands for Asset Limited, Income Constrained, Employed, found that 46 percent of Alabama families in 2023 struggled to cover essentials like housing, food, child care and health care, even though many are working.
The findings place Alabama above the national average for financial hardship, with 42 percent of U.S. households overall falling below the ALICE Threshold. The report highlights a growing crisis among working families who earn too much to qualify for traditional public assistance but not enough to meet the rising cost of living.
Internationally, Alabama’s rate of financial insecurity is far higher than that of most developed countries. Many European nations, including Denmark, Sweden and France, report poverty rates below 10 percent. These countries also have stronger social safety nets, higher minimum wages relative to median earnings and more extensive public assistance programs, which help reduce the number of working families struggling to meet basic needs. In contrast, the United States has a larger “poverty gap,” with poor households’ incomes falling nearly 40 percent below the poverty line, second only to Italy among wealthy nations.
Efforts to address the problem are underway at both the state and local levels. United Ways across Alabama are using the ALICE data to inform policy discussions, raise awareness and guide community interventions. Local branches, such as River Region United Way, have launched campaigns to support ALICE families with programs focused on food, housing, education and health care. Despite these efforts, traditional public assistance programs remain out of reach for many. Only 17 percent of ALICE households in Alabama received SNAP benefits in 2023, often due to strict income eligibility requirements. State programs like Medicaid offer some relief, but many working families still do not qualify.
At the federal level, proposals such as President Donald Trump’s “Big Beautiful Bill” have promised economic growth, job creation and higher after-tax incomes for American families. The administration projects a 4.6 to 4.9 percent larger economy and millions of new jobs. However, independent analyses warn that the bill’s large tax cuts and new tariffs could increase the federal deficit by trillions and, in the long run, reduce economic output. For ALICE households, the impact is mixed. While some may benefit from job growth and higher wages, others could face higher costs and reduced support if social safety nets are cut or prices rise due to tariffs.
Alabama’s community organizations continue to push for stronger policies to help working families secure a stable future. The ALICE Report is fueling calls for increased support and more comprehensive solutions, as the state faces higher rates of financial hardship than most of the country and the developed world.