Editor’s note: this brief blog post draws heavily from new research by the United Way. A link to the organization’s full report is below.
According to traditional measures, from 2010 to 2018, Virginia showed steady economic improvements. Unemployment in the state and across the U.S. fell to historic lows, GDP grew, and wages rose slightly. Yet despite the Commonwealth’s economic strengths, sharp disparities in income and wealth exist from one region, county, or even community to the next.
In 2018, eight years after the end of the Great Recession, 39% of Virginia’s 3,169,804 households still struggled to make ends meet. And while 10% of these households were living below the Federal Poverty Level (FPL), another 29% — almost three times as many — were ALICE households: Asset Limited, Income Constrained, Employed. These households earned above the federal poverty level, but not enough to afford basic household necessities.
“This research has had a huge impact on my thinking about our mission and the people we are serving,” said VCCS Chancellor Glenn DuBois. “We need to do more to meet the needs of a huge group of people who don’t have semesters and years to seek traditional college degrees. To be sure, our workforce and career training programs are our fastest-growing segment. And we think demand for these programs will only grow in the wake of the economic disruption caused by the COVID-19 pandemic.”
The report, “Alice in Virginia: a financial hardship story” was sponsored by United Ways from across Virginia, Virginia’s Community Colleges, Compare.com, Atlantic Union Bank, the Virginia Association of Free and Charitable Clinics, and was released July 22.
The research spotlights persistent level of difficulty faced by ALICE households, and draws attention to three trends:
• The cost of living is increasing for ALICE households. From 2007 to 2018, the cost of household essentials (housing, child care, food, transportation, health care, and technology) increased faster than the cost of other goods and services.
• Worker vulnerability is increasing, while wages stagnate in ALICE jobs. In 2018, 47% of Virginia workers were paid by the hour, and 53% of the state’s jobs paid less than $20 per hour.
• ALICE households have increased over time as a result of rising costs and stagnant wages. There are almost three times as many ALICE households as there are households in poverty.
To see the full report, click here.