The ALICE reports’ findings are often overstated or inaccurately portrayed by politicians, the media and even United Way itself.
One common mistake made in reporting on the ALICE findings is to confuse households with individuals. For instance, the 2019 ALICE report relies on household-based statistics to estimate financial struggle in the population, estimating that 43% of Michigan households, or 1.66 million household units, “could not afford basic needs such as housing, child care, food, transportation, health care, and technology in 2017.”
Media outlets and government officials regularly ignore the difference between households and individuals. For instance, Gov. Gretchen Whitmer, referencing the 2019 ALICE report in a February 2021 press release, said, “Today, 43% of Michiganders earn less than the basic cost of living.” It might be the case that the number of individuals living in the households identified by the ALICE report represent 43% of the state’s total population, but the ALICE report does not say this. Several media outlets repeated this misstatement by the governor.
Other times ALICE figures get entirely misinterpreted. The Michigan Department of Labor and Economic Opportunity, for example, confuses households for individuals twice on the same website. It says, according to the ALICE report, “1.5 million Michiganders struggle to afford the basic necessities of housing, child care, food, technology, health care and transportation.” The 1.5 million referenced is not the number of individuals, but households. Later, the department’s website says, “[T]he United Way’s ALICE Report shows that 43% or 4.3 million of working Michigan households struggle to afford the necessities.” This is obviously incorrect as the total number of households in Michigan is less than four million, as noted in the ALICE report.
At times, the ALICE reports themselves confuse households with individuals. The 2019 version for Michigan, for example, uses these terms interchangeably in places. In one section, it describes the “more than 1,600,000 households in Michigan” as “representing 43 percent of the state’s population.” Websites maintained by United Way also confuse households and individuals. One website reads, “1.66 million households — 43% of Michigan’s population — cannot afford basic household necessities.”
Media reports regularly assume that the ALICE methodology measures how many households in Michigan are “asset limited, income constrained, and employed.” For example, this headline assumes ALICE calculates the number of employed people who are impoverished: “Michigan's working poor grows to 43 percent of all households.” As stated, the reports does not attempt to assess what portion of ALICE households in Michigan are employed.
The survival budgets created by the ALICE report are often mischaracterized. The reports use the word “costs” to describe average spending data that their budgets attempt to estimate. For example, the 2019 report for Michigan says, “The Household Survival Budget calculates the actual costs of basic necessities,” and ALICE households earn “less than the basic cost of living for the state.” A website maintained by United Way of Northern New Jersey describes it like this: “The ALICE Household Survival Budget is the bare minimum cost of household basics necessary to live and work in the modern economy.”
As demonstrated, the threshold does not consider what goods cost, but instead represents an estimated average of the amount people typically spent on certain goods and services. Finding the amount needed to afford these items would require identifying the lowest price of these essential goods or services. The ALICE threshold does attempt to do that and, as such, its thresholds do not estimate a minimum amount needed to afford the items in the survival budget.
Seeing that the report itself confuses minimum costs with average spending levels, it should come as no surprise that media reports often describe these thresholds inaccurately. Stories referencing the ALICE report often portray the survival budgets as representing minimum prices. For example, see these headlines:
The content of news articles and other media reports also commonly confuse average spending levels with minimum costs. Here is just a sampling of examples:
Misreporting of research findings is a common problem. Statistical analyses can be complicated and difficult to describe in media outlets. But the ALICE report’s findings are consistently misreported and always in one direction: towards exaggerating the scope, detail and findings of the report. No doubt the fact the report itself and spin-off material produced by United Way frequently confuse the details of the study contribute to this problem.