You Can't Fix What You Don't Measure: How ALICE Can Help Rebuild the Middle Class

DOIhttp://doi.org/10.1111/puar.13085
AuthorStephanie Hoopes,Dan Treglia
Date01 September 2019
Published date01 September 2019
You Can’t Fix What You Don’t Measure: How ALICE Can Help Rebuild the Middle Class 777
Abstract: Seventy percent of Americans identify as middle class, but one in three middle-income households do not
earn enough to support their family at the most basic level, and four in five do not earn enough to afford a sustainable
budget. This incongruity explains the increasing frustration of many workers. Yet official government measures do not
capture this reality, and as a result, policy makers continue to create economic policies that perpetuate the structural
mismatch between wages and costs. This Viewpoint essay addresses these shortcomings. After reviewing alternatives
to the federal poverty level, it argues that the most realistic and accurate floor to the middle class is the ALICE (Asset
Limited, Income Constrained, Employed) Household Survival Budget. The essay then turns to policies that help
realign wages and cost of living and presents initiatives that are being implemented in states across the country. Four
policy areas would enable more workers to support their families and fulfill the promise of being middle class in
America: meaningful work with stable and sufficient wages, upskilling and digital retooling, fiscal cushion for periods
of financial instability, and affordable credit.
The American dream suggests that anyone
who works hard can support their family,
but this foundational concept is increasingly
obsolete for the nearly 70 percent of Americans
who identify as middle class. The cost of household
necessities has risen faster than wages; as a result, an
increasing number of working families—many who
consider themselves middle class—cannot afford basic
necessities, yet they earn too much to be eligible for
most types of social service assistance. As a result,
these families are frustrated and face daily stress from
financial instability (Newport 2017; Northwestern
Mutual 2017; Pew Research Center 2015; Pressman
2016; Reeves, Guyot, and Krause 2018).
This Viewpoint essay argues that by using the
inaccurate and antiquated federal poverty level
(FPL) as the basis for understanding financial need,
government fails to measure and address more systemic
issues that underlie America’s economic well-being.
After reviewing alternatives to the FPL, this essay
outlines a framework to better establish a base level to
define the middle class and presents promising policy
initiatives being piloted across the United States.
Def‌ining the Middle Class: The Dream and
the Reality
The “middle class” is a nebulous expression, generally
wrapped around the concept of the American dream, a
term first articulated in 1931 and now fully ensconced
in the national culture. The expectation is that if you
work hard enough, you can achieve the American
dream, earning enough to support a family on one
salary. Hence, one full-time worker in a household is
expected to earn enough to lead a middle-class lifestyle
that affords them housing, childcare, sufficient food,
and even an unexpected medical bill, without worry
of financial collapse (Northwest Mutual 2017; Pew
Research Center 2015; Reeves, Guyot, and Krause
2018; Smith 2017; Wills 2015).
The government’s primary measure of financial insecurity,
the federal poverty level, which was developed for
President Lyndon B. Johnson’s War on Poverty in 1964,
shows that only 15 percent of households are struggling.
When compared with the most basic measure of the
middle class—the three middle-income quintiles—it
closely matches the floor of the second quintile (see the
example for New Jersey in figure 1; DHHS 2016).
The cost of living compared with wages, however,
makes the FPL a poor reflection of actual
circumstances (Mukhopadhyay et al. 2012). The
FPL’s flaws are well documented—for example, it is
based entirely on food costs and fails to account for
geographic variation—and it is generally considered
outdated and inadequate (Citro and Michael 1995;
U.S. Census Bureau 2017). Actual cost of living
budgets—demonstrated in the ALICE (Asset Limited,
Income Constrained, Employed) Household Survival
Budget (outlined in more depth in later sections)—
suggest that the floor to the middle class is actually
You Can’t Fix What You Dont Measure: How ALICE Can
Help Rebuild the Middle Class
Stephanie Hoopes
Dan Treglia
National ALICE Research Project at United For ALICE
University of Pennsylvania and National
ALICE Research Project at United For ALICE
Dan Treglia is a postdoctoral fellow at
the University of Pennsylvania’s School of
Social Policy and Practice and a research
fellow with the ALICE Research Project at
United For ALICE.
Email: dtreglia@unitedwaynnj.org
Stephanie Hoopes is national director
of the ALICE Research Project at United
For ALICE.
Email: stephanie.hoopes@unitedwaynnj.org
Public Administration Review,
Vol. 79, Iss. 5, pp. 777–783. © 2019 by
The American Society for Public Administration.
DOI: 10.1111/puar.13085.
Viewpoint
Stephen E. Condrey
and Tonya Neaves,
Associate Editors

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