ALICE: Living paycheck to paycheck during COVID - VCCS

ALICE: Living paycheck to paycheck during COVID

Home|Blog|ALICE: Living paycheck to paycheck during COVID

COVID was a challenge of epic proportions. In addition to the health threat it posed to society, the pandemic also put a strain on hundreds of thousands of Virginia households that were already in financial peril.

The United Ways of Virginia, using data compiled by the U.S. Census Bureau, found more than 911-thousand Virginia households were ALICE (Asset Limited, Income Constrained, Employed) in 2021.

ALICE households earn above the Federal Poverty Level (FPL), but don’t earn enough to cover the essentials like housing, childcare, food, transportation, health care, and a smartphone plan, plus taxes. Said another way, they’re forced to make impossible choices in order to make ends meet.

Public assistance programs were temporarily expanded in 2021 in response to the pandemic, but it wasn’t enough to bring most ALICE households to financial stability.

This is a VCCS Story

With 41 percent of Virginia’s population statewide barely getting by at the ALICE income level or struggling even more at the Federal Poverty Level, this is a story for Virginia’s Community Colleges.  Many of our students come from households that face financial hardships.

The State Council of Higher Education for Virginia (SCHEV) reports that over the past decade, the number of Virginia college students receiving Pell Grants has doubled. Pell Grants are awarded to students who come from families living at or below the Federal Poverty Level.  SCHEV reports 45 percent of students who enter our colleges qualify for Pell Grants.

 The bare minimum

According to the 2023 United for ALICE Report, the Household Survival Budget in today’s economy is $2,543 a month or $30,516 a year for single adults. For families of four, it’s $5,899 a month or $70,788 a year.
















Those figures are well above the FPL, or $26,500 for a family of four. But advocates for ALICE claim the FPL is flawed because it isn’t based on the cost of contemporary household necessities, nor is it adjusted to reflect cost-of-living differences across the U.S. Despite its inadequacies, the FPL remains the standard for policymakers trying to gauge the extent of financial hardship in Virginia and the rest of the country.

Even though the median wage among the twenty most common jobs in the state (fast food workers, retail salespersons, cashiers, stockers, personal care aides, cooks, laborers, movers, wait staff and nursing assistants) saw a modest increase, 60% of these Top 20 jobs still paid less than $20 an hour in 2021.

The report also found racial disparities when it comes to financial stress: 58.8% of Black households and 55.8% of Hispanic ones had incomes below the ALICE income level. On the other hand, 35.5% of white households were below that level.

There are also warning signs that the economic situation for households below the ALICE Threshold has worsened since 2021, including higher levels of food insufficiency, feelings of anxiety and depression, continued difficulty paying bills, medical debt, and lack of savings.

The ALICE dilemma will require a bold solution, but the report’s authors say the public can help by advocating for more accurate data collection by the U.S. Census Bureau for people who have been “historically undercounted.” After all, the report maintains, the state’s economic vitality is tied inextricably to the financial stability of its residents.


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