Key Terms

Household Survival Budget: The bare-minimum costs of basic necessities (housing, child care, food, transportation, health care, and a smartphone plan).

ALICE Threshold: The average income needed to afford the Household Survival Budget. Households below the ALICE Threshold include both ALICE and poverty-level households.

ALICE: Households with income above the Federal Poverty Level but below the basic cost of living.

Poverty: Households earning below the Federal Poverty Level

Total Households: The number of households as reported by the American Community Survey.

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Research Center

ALICE Essentials Index

Inflation is one of the most widely utilized indicators of economic health. When prices increase faster than wages and other sources of income, purchasing power decreases and households struggle to make ends meet. This is especially challenging for households that are ALICEAsset Limited, Income Constrained, Employed, with income above the Federal Poverty Level (FPL) but below the cost of basics included in the Household Survival Budget.

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Research Center • ALICE Essentials Index

Inflation is one of the most widely utilized indicators of economic health. When prices increase faster than wages and other sources of income, purchasing power decreases and households struggle to make ends meet. This is especially challenging for households that are ALICEAsset Limited, Income Constrained, Employed, with income above the Federal Poverty Level (FPL) but below the cost of basics included in the ALICE Household Survival Budget.

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The ALICE Essentials Index measures changes over time in the costs of the household essentials that matter most to ALICE and poverty-level households: housing, child care, food, transportation, health care, and basic technology. The traditional measure of inflation, the Bureau of Labor Statistics' Consumer Price Index (CPI), tracks a much larger basket of over 200 goods and services — items that financially insecure households can't afford on a regular basis, like full-service meals at restaurants, wine, major appliances, flights, and jewelry. Tracking costs over time using this larger basket alone can conceal important changes in the costs of basics.

This page defaults to national data. To add state-level data, select an ALICE partner state below.

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The Cost of Household Basics is Rising

Tracking changes in the cost of basics, the ALICE Essentials Index has consistently outpaced the broader CPI nationwide since 2007. Costs for both measures increased at a faster pace following the COVID-19 pandemic, peaking between 2021 and 2023. During this period, the ALICE Essentials Index increased at an annual rate of 7.3% compared to 6.1% for CPI — both much faster than the annual rates from 2007 to 2010 (3.3% annual increase for the ALICE Essentials Index and 1.7% for CPI).

U.S. Inflation Indices, 2007–2024

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Note: In this figure, the ALICE Essentials Index was adjusted to the CPI base value of 207 in 2007. The ALICE Essentials Index rates for 2023 and 2024 are projections. CPI 2024 is preliminary (based on data through March 2024).
Sources: ALICE Essentials Index, 2007–2024; Bureau of Labor Statistics, 2007–2024—CPI; Bureau of Labor Statistics, 2007–2023—Occupational Employment and Wage Statistics

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Access additional data on ALICE across the U.S. on the National Overview page

Rising Wages Still Can’t Cover Essentials

While wages have risen substantially in recent years, so have costs. And even in occupations where wages are growing faster than costs, wages started from such a low level that many workers are still not able to cover household essentials.

Median Annual Wages of Selected Common Occupations vs. Annual Total ALICE Household Survival Budget (1 Adult, 1 School-Age Child), U.S., 2022

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Note: Wages and costs from 2022 are used in this figure because the data is most accurate and least susceptible to revision. Occupations were chosen based on the following criteria: 1) The occupation is a common job for ALICE workers; 2) the occupation exists in most states; and 3) together, the occupations span a variety of sectors.
Sources: ALICE Household Survival Budget, 2022; Bureau of Labor Statistics, 2022—Occupational Employment and Wage Statistics

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For more data on wages and occupations in all states, use the ALICE Wage Tool

To see Bureau of Labor Statistics wage data for additional years and occupations, go to https://www.bls.gov/oes/tables.htm

Inflation in Basic Costs Varies by Location

Between 2007 and 2024, household essentials were 18% to 26% more expensive in urban areas than in rural areas. Costs increased at similar, relatively low rates until 2016, when the cost of essentials began increasing faster in urban areas and continued on that trajectory through 2021. Rates increased substantially in both areas from 2021 to 2023, but the rate in rural areas (7.5%), was even higher than in urban areas (7.2%).

ALICE Essentials Index, Urban vs. Rural Counties, U.S., 2007–2024

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Note: For ease of comparison, the ALICE Essentials Index – Rural is set to start at 100. The ALICE Essentials Index rates for 2023 and 2024 are projections.
Source: ALICE Essentials Index, 2007–2024

The ALICE Essentials Index provides comparable measures of inflation for the four regions of the U.S. By 2024, basic household goods were most expensive in the West and Northeast, less expensive in the South, and least expensive in the Midwest.

Over time, costs and inflation rates for household basics have varied across regions. For example, in the West, inflation was relatively gradual from 2007 to 2016 but then began increasing at a faster rate, eventually surpassing basic costs in the Northeast. In the South and Midwest, inflation had slowed down prior to the pandemic, but then sped up again by 2021.

All regions experienced the most substantial increase in costs during the period of 2021 to 2023, with the ALICE Essentials Index increasing at an average annual rate of 7.1% in the Midwest, 6.5% in the Northeast, 6.9% in the West, and 7.8% in the South.

ALICE Essentials Index by Region, U.S., 2007–2024

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Note: For ease of comparison, regional variations of the ALICE Essentials Index have been indexed, with the Midwest set to 100. The ALICE Essentials Index rates for 2023 and 2024 are projections.
Source: ALICE Essentials Index, 2007–2024

Policy Implications

CPI is integrated into government policy, informing interest rates, cost-of-living increases for public assistance programs, and more. Yet it does not provide policymakers with a full picture of who is bearing the brunt of inflation, or how the effectiveness of social insurance programs is diminished as benefits continue to fall further behind the cost of basics. As a result, many government policies fall short in their efforts to support workers and reduce hardship. This is especially true for the programs most relevant to ALICE households, including inflation strategy; tax brackets and credits; the annual increase of benefits in a range of programs from Social Security to pensions for veterans and civil servants; and the annual increase of the FPL (as well as programs with eligibility based on the FPL, like SNAP and Medicaid).

Learn More and Take Action

By increasing the accuracy of data on hardship, ALICE measures are designed to help lift all boats: Improving conditions for ALICE families will in turn fuel economic growth, benefiting all households, communities, and businesses across the country.

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ALICE In Action

See examples of partners turning data into action to make a difference for ALICE.

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ALICE Wage Tool

Explore how wage levels impact an ALICE household's ability to afford basic expenses.

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ALICE Legislative District Tool

See how financial hardship differs by legislative district at the state and national level.

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