Working – And Still Falling Short

Updated ALICE Report Shows Persistent Challenges

MINNESOTA – The newly released State of ALICE in Minnesota update reveals that traditional measures of poverty have severely undercounted the number of households statewide living in financial hardship. While 9% of all households in the state lived in poverty in 2023, the updated research shows that 25% – nearly three times as many – were ALICE® (Asset Limited, Income Constrained, Employed). Combined, 34% of Minnesota’s households fell below the ALICE Threshold of Financial Survival in 2023.

United Ways across Minnesota, including our region first partnered with research entity United for ALICE last fall to bring ALICE data to the state of Minnesota.

“Updated point-in-time data is critical to understanding whether we are making a difference in stabilizing lives for Minnesotans,” said United Ways of Minnesota Executive Director Doris Pagelkopf. “When we underestimate how many households are struggling, we underestimate what it truly takes to build thriving communities,”

ALICE households bring in less than the basic costs of housing, child care, food, transportation, health care and technology, plus taxes. Yet because their income is above the Federal Poverty Level, they often don’t qualify for assistance.

“This means entire families and essential workers may be overlooked for support, left without the resources they need to stay healthy, achieve financial stability and reach their fullest potential,” Pagelkopf said. “That’s a loss not just for ALICE, but for all of us.”

The crux of the struggle for ALICE families is the gap between wages and expenses. In 2023, a family of four in Minnesota needed $81,216 just to cover the essentials – nearly three times the Federal Poverty Level of $30,000. Yet even with both parents working full time in two of the state’s most common jobs – families combined income is still falling short of the cost of basics.

The State of ALICE in Minnesota also reveals that in 2023

• Minnesota ranked 6th in financial hardship among all 50 states plus the District of Columbia, with one of the nation’s lowest percentages of households struggling to make ends meet.
• Some groups face financial hardship at disproportionate rates, with 60% of the youngest and 49% of the oldest households in Minnesota falling below the ALICE Threshold, compared with 27% of households headed by someone age 25-44.
• Housing continues to be an obstacle for struggling families. Among households below the ALICE Threshold in Minnesota, 71% of households that rented and 56% of those that owned were rent and housing burdened – meaning they paid 30% or more of their income on rent and housing costs.

“ALICE families are especially vulnerable during natural disasters and times of economic uncertainty and yet often feel unseen or left behind,” said Stephanie Hoopes, Ph.D., National Director at United For ALICE. “By providing a name and a way to quantify these households, we’re equipping communities with the data to build solutions that offer better choices and real pathways to stability.”

More state and local data is available through the interactive dashboards on UnitedForALICE.org/Minnesota.

About Us: United Way Team Serving Douglas, Otter Tail, Wadena, Pope, and parts of Todd Counties.

About United Ways of Minnesota

United Ways of Minnesota was created to maximize the benefit of a statewide organization for local United Ways. Our priorities include sharing and exchanging best practices, successes, resources and management. Our Statewide Association Board of Directors comprised of one executive director and board members from the local member United Ways. Our board of directors meets four times per year and maintains a committee structure that addresses executive and legislative affairs, training, planning and communications.

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 35 states and the District of Columbia and includes United Ways, corporations, nonprofits and foundations in Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawai‘i, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, 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.