United Way data show rising cost of basics outpaces inflation in Indiana

Research highlights households living paycheck to paycheck

Submitted

The cost of household necessities in Indiana has outpaced inflation every year for more than 15 years, leaving many households struggling to get by, according to new data from United For ALICE provided through a partnership between Indiana United Ways and United Way of Central Indiana.

The latest State of ALICE report for Indiana includes data from the ALICE Essentials Index, which tracks the rising costs of only six basics families need to live and work: housing, child care, food, transportation, health care and technology. Between 2007 and 2024, the ALICE Essentials Index for Indiana increased more than 61 percent, compared with 52 percent for the broader Consumer Price Index (CPI), which reports inflation across more than 200 categories of goods and services.

The report highlights the growing financial strains on households in poverty and ALICE, an acronym for Asset Limited, Income Constrained, Employed. ALICE households earn 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. From child care providers to cashiers to nursing assistants, ALICE workers hold essential jobs that keep our economy running and that we depend on every day.

In central Indiana, 35 percent of households are struggling to afford their basic needs, ALICE data shows. That’s over one in three households – 257,530 households.

Statewide, 38 percent of households – over 1 million households – can’t make ends meet.

Indiana United Ways, United Way of Central Indiana and their partners use ALICE data to understand the challenges facing our neighbors and create solutions that help families meet their needs today and build stability for tomorrow.

“Forty-two local United Ways across the state of Indiana actively listen for and strive to understand the causes of financial hardship for individuals and families in their regions of the state,” said Michael Budd, president and CEO of Indiana United Ways. “ALICE data enables them to focus their strategies and work collaboratively to address the urgent needs of struggling households while identifying barriers preventing long-term success. For every household that qualifies for social supports, many more go unassisted because they are just above the income eligibility requirements. United Way organizations across Indiana work every day to help these struggling households find local resources and have access to the full range of supports they need to thrive.”

Denise Luster, chief data and technology officer for United Way of Central Indiana, said, “Across Central Indiana, ALICE families are the backbone of our communities – the caregivers, delivery drivers and essential workers we rely on every day. Yet too many continue to face barriers to financial stability despite working hard. At United Way of Central Indiana, we are committed to lifting the voices of ALICE families and using this data to mobilize resources, expand opportunity and help distance 10,000 households away from poverty. Because when ALICE families thrive, our entire community is stronger.”

While the Federal Poverty Level has long been used as the basis for determining eligibility for public assistance, the ALICE report shows that this official measure is obsolete and underestimates the true extent of financial hardship.

ALICE data shows that the minimum cost to live and work in Indiana in 2024 was $28,764 for a single adult and $74,028 for a family of four with two adults, an infant and a preschooler – nearly double the Federal Poverty Level figure of $15,060 for a single adult and more than double the figure of $31,200 for a family of four.

Data from the report shows that in United Way of Central Indiana’s seven-county service area of Boone, Hamilton, Hancock, Hendricks, Marion, Morgan, and Putnam counties:

• 24 percent of households fall below the ALICE threshold but above the Federal Poverty Level, and 11 percent of households fall below the Federal Poverty Level.
• Marion County has the highest percentage of households below ALICE at 41 percent, followed by Putnam County at 38 percent.
• Marion County has the highest number of households below ALICE with 168,381 households, followed by Hamilton County with 34,764 households.
• Racial disparities persist across United Way of Central Indiana’s region, with 50 percent of black households and 42 percent of Hispanic households living in poverty or below the ALICE Threshold.

Key statewide findings from the report show that in 2024:

• Family structure is a strong predictor of financial stability. 72 percent of households headed by single women and 49 percent of households headed by single men were below the ALICE Threshold in 2024.
• Disparities are stark. 55 percent of black households in Indiana live below the ALICE Threshold, compared to 36 percent of white households. Hispanic and multiracial households face similar challenges at 43 percent. While the largest number of households in need are white, communities of color are disproportionately impacted.
• Financial hardship is not limited to one type of community. ALICE households are present in every county across Indiana, and the rates of hardship are nearly identical in rural and urban areas – 38 percent of households fall below the ALICE Threshold in both.

To read the report and dive into statewide and county-specific data, go to UnitedForALICE.org/Indiana.

For more information and interview requests about ALICE data in your community, please contact your local United Way.

In late June, Indiana United Ways plans to relaunch “Making Tough Choices,” an interactive, online simulation tool that allows people to dive deeper into the challenges ALICE families face. Once available, the tool will be featured at iuw.org.