Pandemic Impact: 24,145 More Households Financially Insecure
New ALICE Report shows pandemic aids temporarily blunted the financial crisis, yet warning signs are on the horizon
Richmond, Virginia (May 9, 2023) — The amount of greater Richmond and Petersburg families unable to afford basic needs grew by 24,145 households during the first two years of the COVID-19 pandemic, according to a new report the United Way of Greater Richmond & Petersburg and its research partner United For ALICE.
The increase resulted in approximately 205,000 households – about 43% of the region’s families – struggling to afford budget items like housing, child care, transportation and health care.
Researchers noted that about 49,000 local households were in poverty at the time.
Another 156,000 of families fit within the ALICE category, which stands for Asset Limited, Income Constrained and Employed. ALICE households have incomes above the Federal Poverty Level, but earn less than required to meet basic costs.
United Way researchers highlight how ALICE families are often overlooked and undercounted by traditional poverty measures. The ALICE population includes the nation’s child care workers, home health aides and cashiers heralded during the pandemic – those working low-wage jobs, with little or no savings and one emergency away from poverty.
When examining data from United Way of Greater Richmond & Petersburg’s region using the ALICE in the Crosscurrents: COVID and Financial Hardship report the total number of financially insecure households rose by 24,145 (13.3%) between 2019 and 2021 – almost double the 6.8% increase in the state’s overall population. The number of ALICE households increased by 21,397 during that time, and the number of households in poverty increased by 2,748.
While job disruptions and inflation delivered significant financial pain, a combination of pandemic supports and rising wages did help minimize what could have been a deeper financial crisis, the report finds. However, as some benefits are peeled back, and inflation persists, signs of greater financial stress are on the horizon.
“It could have been so much worse for these families, whose struggle to feed their families, afford health care and access quality education was often hidden in plain sight until the pandemic,” said United Way of Greater Richmond & Petersburg Interim CEO Angela Otto. “Equipped with the ALICE name and data, we can do even better to develop effective policies and track our progress toward reducing financial hardship in our region. We have an opportunity to build on what was learned during the pandemic as ALICE continues to face economic uncertainty.”
According to the report, the annual ALICE Household Survival Budget, which is the basic cost needed to live and work in the Greater Richmond and Petersburg area for a family of four with an infant and a preschooler, was $76,971 in 2021.
Even with the variety of temporary pandemic supports available in 2021, a family of four with two-full time workers earning salaries as a retail salesperson and a cashier – two of the most common occupations in Virginia, was still unable to meet their basic expenses with the help of supports such as the enhanced child tax credit, the child and dependent care tax credit and the Economic Impact Payments.
“A positive change during the pandemic was that tax credits, stimulus payments and rental assistance were available for ALICE households and provided strong relief,” said Stephanie Hoopes, Ph.D., United For ALICE National Director. “However, as some of these supports come to an end, growing food insufficiency and other indicators reveal continued stress. Ignoring these warning signs places ALICE, our economy and the well-being of our communities at great risk.”
Additional report insights include:
- Racial disparities in the Greater Richmond and Petersburg region persist in the rates of financial hardship; 58.8% of Black, 55.8% of Hispanic and 35.5% of White households were below the ALICE Threshold in 2021.
- In 2021, 60% of the 20 most common jobs in Virginia still paid less than $20 per hour. Earning less than $20 hourly was not enough to support a family of four with an infant and a preschooler, even with two parents earning this salary.
To read the report and access online, interactive dashboards that provide data on financial hardship at the state, county and local level, visit Virginia | UnitedForALICE
About United For ALICE
United For ALICE is a driver of innovation, research and action to improve life across the country for ALICE (Asset Limited, Income Constrained, Employed) and for all. Through the development of the ALICE measurements, a comprehensive, unbiased picture of financial hardship has emerged. Harnessing this data and research on the mismatch between low-paying jobs and the cost of survival, ALICE partners convene, advocate and collaborate on solutions that promote financial stability at local, state and national levels. This grassroots ALICE movement, led by United Way of Northern New Jersey, has spread to 27 states and includes United Ways, corporations, nonprofits and foundations in Arkansas, Connecticut, Delaware, Florida, Georgia, Hawai‘i, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Mississippi, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Virginia, Washington, Washington, D.C., West Virginia and Wisconsin; we are United For ALICE. For more information, visit: UnitedForALICE.org.