The State of ALICE in KENTUCKY
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Introducing ALICE
In 2024, based on the Federal Poverty Level (FPL), 16% of Kentucky households were defined as being in poverty. Yet this measure did not account for an additional 26% of the state’s households that were also in financial hardship. These households are ALICE: Asset Limited, Income Constrained, Employed — earning above the FPL, but not enough to afford basic expenses in the county where they live.
Forty-Three Percent of Kentucky Households Faced Financial Hardship in 2024
Total State Households: 1,835,838
Below ALICE
Threshold
43%
Note: Note: In Kentucky in 2024, out of 1,835,838 households, there were 301,973 (16.4%) in poverty plus 481,948 (26.3%) that were ALICE, totaling 783,921 (42.7%) below the ALICE Threshold, which is rounded to 43% in this Report.
Sources: ALICE Threshold, 2010–2024; U.S. Census Bureau, American Community Survey, 2024
Combining ALICE households plus those living in poverty, an estimated 43% of households in Kentucky were below the ALICE Threshold in 2024 (Figure 1). This rate was higher than the national average (41%) and placed Kentucky 40th among all states and the District of Columbia (with 1st representing the lowest rate of hardship).
Households below the ALICE Threshold don’t have enough income to afford their basic needs. They are forced to make impossible choices, like deciding whether to pay for utilities or a tank of gas; whether to buy food or fill a prescription; whether to live close to work and pay more for housing or opt for a longer, more costly commute. And they are less likely to have the resources to cover unexpected household expenses (like an unforeseen car repair or a costly medical bill), or to recover from crises, both widespread (like a natural disaster or public health emergency) and personal (like the loss of a job or family member).
There are households below the ALICE Threshold across demographic groups, living in every state and county in the U.S. These households play a vital role in their communities as neighbors, family members, and civic participants, and they contribute to their local economies as workers, consumers, and taxpayers. Workers in households below the ALICE Threshold perform the jobs that keep our economy functioning smoothly — they are child care providers, food service workers, cashiers, personal care aides, delivery drivers, and more. Yet their own households struggle to afford basics.
There is no single cause — or solution — because all households are unique and the reasons that households face financial hardship are complex and interrelated. Targeted interventions can temporarily help ease challenges like food insecurity or housing cost burden, but improving overall financial stability for the long term requires more comprehensive strategies. Coordinated action is needed across multiple levels — including household supports, community infrastructure, employer practices, and public policy — to address the upstream conditions that contribute to persistent hardship for ALICE households in the state and across the nation.
The Federal Poverty Level (FPL) is obsolete. It does not consider the wide variation in cost of living by location (except for a slightly higher state-level FPL for Alaska and Hawai‘i), nor has its methodology been updated since it was formulated in the 1960s, despite changing economic conditions. As a result, the official poverty rate sharply underestimates the true extent of financial hardship in the U.S. And because the FPL, or multiples of the FPL, define eligibility for many types of public assistance, ALICE households often do not qualify. In 2024, the FPL was $15,060 for a single adult and $31,200 for a family of four.
Household Survival Budget Costs Exceeded Wages of Common Jobs and the FPL
Family of Four, Kentucky, 2024
Note: Cooks season and prepare foods in restaurants and other establishments. Tellers process routine transactions, such as cashing checks and depositing money, at a bank or credit union.
Sources: ALICE Household Survival Budget, 2024; Bureau of Labor Statistics—Occupational Employment Statistics, 2024; U.S. Census Bureau, Federal Poverty Measure, 2024
The ALICE measures, developed by United For ALICE, present a more comprehensive picture of financial hardship by including ALICE households — those with income above the FPL, but below the cost of basics.
The two pillars of the ALICE measures are household costs and income. The ALICE Household Survival Budget estimates the cost of household basics — housing, child care, food, transportation, health care, and technology, plus taxes — for each county in Kentucky, derived from a range of publicly available data sources. This is a minimal budget, with no room for emergency expenses, debt payments, or saving for the future. Change over time in the cost of household basics is tracked in the ALICE Essentials Index.
For household income, ALICE measures rely on the U.S. Census Bureau’s American Community Survey (ACS) — both household tabulated data and individual data from the Public Use Microdata Sample (PUMS) records. Households with income below the Household Survival Budget for their household type and county are below the ALICE Threshold — including both households in poverty and ALICE households. The ALICE Threshold is a more comprehensive measure of financial hardship than the FPL. It relies on income, household type, and local cost of living to estimate how many households are not earning enough to cover the basics.
The core issue is the gap between household income and what families need to make ends meet. This makes it impossible for many households to attain financial stability, no matter how hard they work. Figure 2 shows the mismatch between costs, wages, and the FPL in 2024. First, it includes ALICE Household Survival Budget costs for a Kentucky family with two adults, an infant, and a preschooler (totaling $75,768 annually). Second, it shows the household’s combined full-time earnings with one adult in the household working as a cook and the other working as a teller — two common occupations in the state — totaling $60,915 annually. Finally, the FPL for a family of four is shown ($31,200, the same amount for all contiguous U.S. states).
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