New ALICE report shows wage growth was no match for inflation after a decade of falling behind

Though wages have risen across the country at the fastest rate in four decades, the number of households struggling to get by in Minnesota grew from 2021 to 2022. As a result, a total of 834,343 households or 36%  were living paycheck to paycheck, according to a new report, “ALICE in Minnesota: A Study of Financial Hardship,” from United Way of Douglas & Pope Counties, United Ways of Minnesota, and their research partner, United For ALICE. That calculation includes 233,779 Minnesota households in poverty as well as another 600,564  defined as ALICE.

ALICE® is an acronym for Asset Limited, Income Constrained, Employed, and it’s a way of understanding families, neighbors, and colleagues who work hard, earn above the Federal Poverty Level, but don’t make enough to afford a basic household survival budget. ALICE workers include a varieiety of positions acress many industries — those working low-wage jobs, with little or no savings and one emergency from poverty. As a member of the United Ways of Minnesota, United Way of Douglas & Pope Counties recently joined the United for ALICE network — a national movement to raise awareness about this growing but often hidden population in our communities.

In 2022 in Douglas County, 21% of households were ALICE and 9% of households were in poverty. In Pope County, 22% of households were ALICE and 11% of households were in poverty.

State Average for ALICE households: 26%
State Average for households in poverty: 10%

ALICE in Minnesota: A Study of Financial Hardship shows that while wages were increasing, so too were costs. For a family of four with an infant and a preschooler, the basic costs to live and work in Minnesota, excluding tax credits, rose from $63,444 in 2021 to $77,304 a year later. Compounding the issue in 2022 was the loss of up to $15,000 in federal child tax credits and stimulus payments that this family had access to in 2021.

In 2022, yearly household costs for our service area:

Douglas County
- Single adult: $24,816 
- Family of four: $63,960

Pope County
- Single adult: $25,080
- Family of four: $64,808

These numbers are well above the Federal Poverty Level of $13,590 and $27,750 respectively.

“There is no doubt, bigger paychecks helped, but inflation and the loss of pandemic supports converged to keep ALICE trapped,” said United Way of Douglas & Pope Counties Executive Director Jen Jabas. “This latest data is a reminder that while we have made some progress, our work is far from over.”

The findings in this one-year period are consistent with a more than decade-long trend: Since the end of the Great Recession, despite some ups and downs, the number of ALICE households in Minnesota has been steadily growing. From 2010 to 2022, the total number of households rose by 10%, households in poverty increased by 1% — and the number of ALICE households grew by 33%.

Consider joining us at a LIVE UNITED Luncheon on November 19th (Pope County) or 20th (Douglas County) to learn more about community hardships and how you can be part of making an impact. Visit www.uwdp.org to register.

United Way of Douglas & Pope Counties

About United For ALICE 

United For ALICE is a U.S. research organization driving innovation, research and action to improve life across the country for ALICE (Asset Limited, Income Constrained, Employed) and for all. Through the development of the ALICE measurements, a comprehensive, unbiased picture of financial hardship has emerged. Harnessing this data and research on the mismatch between low-paying jobs and the cost of survival, ALICE partners convene, advocate and collaborate on solutions that promote financial stability at local, state and national levels. This grassroots ALICE movement, led by United Way of Northern New Jersey, has spread to 31 states and includes United Ways, corporations, nonprofits and foundations in Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawai‘i, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, Washington, D.C., West Virginia and Wisconsin; we are United For ALICE. For more information, visit: UnitedForALICE.org.