If you spend the same amount buying food, paying for preschool and driving to work this year compared to last, but your neighbors double what they spend on those items, did you become poorer? According to a perennial report from the United Way, the answer is yes. But that’s a bad measurement of poverty, or financial stability, and shows the flaws with the organization’s Asset Limited, Income Constrained, Employed study.
The United Way has good intentions. The ALICE measurement tries to draw attention to the financial struggles of people who don’t show up in official government poverty statistics. There are millions of these Americans, and many need help. However, the measurement the United Way uses to quantify this problem is counterproductive and detracts from more pressing issues related to poverty.