Steady Stats, Shifting Lives: United Way NCA’s 2025 ALICE Update Reveals Widening Gap Between Income and Survival

WASHINGTON, D.C. (May 20, 2025) – United Way of the National Capital Area (United Way NCA), in partnership with United For ALICE, today released The State of ALICE in the National Capital Area: 2025 Update on Financial Hardship. The bi-annual report reveals that in 2023, 33% of households in the National Capital Area continued to live below the ALICE (Asset Limited, Income Constrained, Employed) threshold, meaning they could not afford basic essentials such as housing, childcare, food, transportation and health care, despite having steady jobs. 

“The 2025 ALICE Report underscores the persistent economic strain faced by households across our region. While the proportion of families living below the ALICE threshold has not significantly changed since our last report two years ago—remaining at roughly one-third in the National Capital Area—this stability masks a deeper story,” said Rosie Allen-Herring, President and CEO of United Way of the National Capital Area. “Strategic policy choices and targeted investments made during and after the pandemic helped mitigate what could have become a much deeper financial crisis. That meant many working families saw modest gains in real wages, and median income levels increased nationally and locally. These findings reaffirm the need for an even greater investment in solutions that create pathways to financial stability for all, particularly as we live through a time where safety nets and supports are under threat, coupled with federal workforce cuts and contractors who are losing their jobs.”

Every two years, United Way NCA releases an ALICE report that provides data on where within the region the ALICE population lives, who makes up the ALICE population, and more. The 2025 report covers data from 2023, and reveals that the cost of basic household necessities in the National Capital Area continues to outweigh wages—underscoring the widening gap between what families earn and what they need to survive. 

The ALICE Household Survival Budget (HSB) is a conservative estimate of the minimum income needed to live and work in the Washington, DC region. For example, a typical working family of four (two adults, one infant, and one preschooler) earning a combined income of $78,000 would need $118,208 to cover basic costs.

That means each adult would need to earn at least $28 an hour to live “paycheck-to-paycheck,” barely making ends meet, without any space for savings, clothing, entertainment, or weathering an unexpected expense.  Despite these sobering numbers, tens of thousands of households in the National Capital Area remain below this threshold, working full time yet falling short of economic stability.

By comparison, in 2021, the same family of four earning a combined $58,500 annually in the National Capital Area could not afford the Household Survival Budget of $101,281–even with the $20,800 in assistance through the expanded Child Tax Credit, the Child and Dependent Care Tax Credit, and the Economic Impact Payments.

While financial hardship spans the entire region, the 2025 ALICE report underscores that single mothers, communities of color, and people who are entering or exiting the workforce face disproportionate challenges. 

Two-thirds of households headed by single females fall below the ALICE Threshold, compared to 19% of families being supported by two working parents. Black and Hispanic households are nearly twice as likely as white households to experience financial instability. Age also matters: 64% of households led by young adults under 25 and 41% of those headed by seniors over 65 struggle to afford basic needs—a reflection of limited earnings early in life and fixed incomes in retirement.

As a data-driven organization, United Way NCA uses the ALICE report as a foundation, but recognizes that these numbers likely understate the full extent of the need. Community conditions have continued to shift rapidly since this data was collected, and indicators on the ground suggest the real number may be even higher. 

Allen-Herring added, “With layoffs occurring across the region, double-income households are being reduced to one or no income, increasing the precarity of ALICE.” 

Financial Empowerment Centers

Recent surveys conducted in May 2025 among United Way of the National Capital Area’s Financial Empowerment Centers (FECs) reveal a notable increase in engagement with dislocated federal workers and contractors across the region. Two of its five centers shared preliminary data to illustrate the local impact. United Way NCA’s Veteran Center reported a more than 30% increase in requests for disability claim assistance and a 10% rise in interest in summer and fall academic enrollment. United Way NCA’s FEC in Prince William County noted a 20% increase in service usage among dislocated workers. 

While not all changes can be directly attributed to federal workforce layoffs, the data underscores the growing demand for community-based support. According to the Urban Institute, nearly one in ten people in the DC metropolitan area are federal workers. If three-quarters of federal jobs were cut, unemployment would increase to 9.6 percent in the Washington metropolitan area, surpassing the worst rate the area saw during the pandemic (9.4 percent). 

In response to this growing need, many of United Way NCA’s FECs have expanded targeted outreach efforts—leveraging social media campaigns, launching dedicated resource websites, delivering presentations at federal worker unions, and participating in specialized job fairs. Several have also introduced programming tailored to career transition and economic recovery, including workshops such as “Turning Layoffs into Level-Ups,” “Community Care: Making the Most of the Benefits Available to You,” and “Career Guidance: Transition to the Private Sector.”

Do More for ALICE

These increases in engagement demonstrate that in times of uncertainty, people turn to the institutions they trust most — and local nonprofits have become vital anchors of stability. According to a recent report by Independent Sector, trust in nonprofits rose five percentage points to 57% last year, with Americans expressing more confidence in nonprofits than in big business, the federal government, or the media to make a positive difference. 

To continue to assist ALICE throughout the National Capital Area, United Way NCA today is launching Do More for ALICE—a 24-day call-to-action campaign supported by MedStar Health. Do More for ALICE is designed to support the growing number of United Way NCA programs that support ALICE families and individuals, including federal workers and contractors struggling to stay afloat in the face of rising costs and economic instability. 

“This report is more than numbers—it’s a call to action to Do More for ALICE,” said Allen-Herring. “Your United Way NCA is uniquely positioned to respond quickly and effectively when families are in crisis. We invite public and private sector leaders to join us in building a region where every household has an opportunity to reach and sustain stability.”

About United Way of the National Capital Area 

United Way of the National Capital Area works to improve the health, education and economic opportunity of every person in the National Capital community. United Way NCA has been improving lives by creating measurable impact in the District of Columbia, Northern Virginia, and Montgomery and Prince George’s Counties for nearly 50 years. In 2020, United Way NCA was among 384 organizations across the United States to receive a generous transformational investment from novelist and venture philanthropist, MacKenzie Scott. For more information about United Way of the National Capital Area, visit UnitedWayNCA.org.