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The Consequences of Insufficient Income

About 30 percent of Bartholomew County households earn below the ALICE Threshold, ALICE (Asset Limited Income Constrained Employed) which means that hundreds of local families are forced to make difficult choices and risky trade-offs every day.

This online Consequences of Insufficient Household Income report explores:

How ALICE and poverty-level families get by when they do not have enough income or assistance to afford basic necessities.

How the six essential areas of a household budget — housing, child care and education, food, transportation, health care, and technology — as well as taxes affect financial decision-making for ALICE families. The larger the gap between income and expenses, the more extreme the decisions, and the greater the risks to a family’s immediate health, safety, and financial stability.

How the tough decisions ALICE households make affect their broader communities, and how future trends may shape those decisions going forward.

This report highlights how choices in one area invariably affect choices in other areas. The problems are complicated and interwoven. With this clear documentation of the issues and how they are interconnected, community stakeholders can start to build solutions for their neighborhoods, towns and cities, counties, and states. For solutions to be effective, they must be comprehensive and interconnected to address as many areas of struggle as possible.

There are specific considerations in each area of the household budget:


Housing is the cornerstone to stability, but it is also the most expensive item in most families’ budget. Without safe, affordable housing, families cannot maintain stability in other areas of life like school and work attendance, or access to health care and healthy food. They may also face long commutes to work, the inability to save for emergencies, and excessive stress.

Child Care and Education

Child care is essential for parents to work and children to be prepared for kindergarten, and education is one of the best predictors of financial well-being in the U.S. Yet child care is also the second most expensive item in the family budget, and ALICE families face challenges finding quality education at every level. Without quality child care, children may not be ready for school and can face health and safety risks, and parents cannot work. Without quality K-12 education, students do not gain the important skills they need to advance to sustainable jobs. And without affordable higher education, students incur debt and forgo job advancement. 


Food is the most basic of all needs. A healthy diet builds overall good health and fuels working and learning throughout the day. In the short term, food is the easiest place for a family to skimp on cost, but in the long term, the consequences of a poor diet or food insecurity can include developmental delays in children, compromised performance at school or work, and chronic disease in adults. ALICE families living in food deserts also face challenges in getting access to healthy foods, such as fresh fruits and vegetables. 


Transportation is necessary to get to jobs, housing, grocery stores, child care, school, and health care providers, as well as for social and faith-based activities. Though public transportation is cheaper than vehicle ownership, it is unavailable in much of the country, so owning a car is essential for many and a purchase most ALICE families struggle to afford. The consequences of buying less expensive vehicles include sacrificing reliability and safety, risking travel delays, and adding costs for repairs, insurance, registration, and traffic fines. click to view

Health Care

Health care is the hardest item to budget and is both a consequence and a cause of financial instability. Depending on age, illnesses, and overall health, costs vary widely between families. While health insurance has become more available to lower-income families since the introduction of the Affordable Care Act in 2014, there are still millions without insurance and even more who cannot access quality, regular health care due to initial cost outlays, work and family obligations, and doctor shortages, particularly in primary care and in rural areas. click to view


Technology has become an essential part of the modern economy, so families need access to basic technology, such as smartphones and home internet, in order to participate. Yet smartphones and home internet add costs to ALICE’s budget. Without access, ALICE families are disadvantaged in job searches and job performance, school performance, accessing public benefits, and health care. Subsidized phone and internet programs exist, but there are significant limitations to performance, eligibility, and enrollment.


Taxes are a necessary additional expense for working ALICE households. Because most ALICE families are not eligible for public assistance, they are net contributors and, on average, pay a higher rate of state and local taxes than households in the highest income bracket. Earned income and child tax credits provide important relief to working families, though primarily those with children under the age of 18. 

Because the problems facing ALICE families are interconnected, effective solutions must be, too.