The number of Virginia households that identify as ALICE—Asset Limited, Income Constrained, Employed—grew 8 percent between 2007 and 2018, even as the number of households in poverty remained flat and the state’s economy improved under traditional measures.
According to the second major study of this population conducted by United for ALICE—a coalition of United Ways, corporations, nonprofits and foundations—29 percent of all households in the state earn more than the federal poverty level, but not enough to afford basic household necessities—housing, child care, food, transportation, health care and technology.
That amount—the ALICE threshold—in Virginia is $29,580 per year for a single adult, $31,752 for a single senior and $78,528 for a family of four with one infant and one preschooler.
By contrast, the report estimates that a household stability budget—which includes a savings category equal to 10 percent of a budget that would allow the household to weather unexpected financial crises such as COVID-19—for a single adult is $53,400 per year.
For a family with two school-aged children, it is $113,004 and for a family with two children in child care, it is $128,784.
The new report, released Wednesday, is a follow-up to the first, which came out in 2017. At that time, 20 percent of Virginia households lived below the ALICE threshold.
The number of households living in poverty—10 percent—has stayed flat, the report found.
Sarah Walsh, chief impact officer for the Rappahannock United Way, attributed the rising number of ALICE households to the fact that although more jobs were added to the economy between 2007 and 2018, the majority of them were hourly, not salaried.
The report shows that the number of low-wage jobs grew from 1.2 million to 1.6 million, while the number of high-wage jobs fell from about 900,000 to about 700,000.
At the same time, the cost of household essentials—housing, child care, food, transportation, health care and a smartphone plan—increased an average of 3.3 percent each year between 2007 and 2018.
The new ALICE report also found that Black and Hispanic households, households headed by someone under 25 and single-female-headed households are more likely to live below the ALICE threshold.
Half of Hispanic households and 55 percent of Black households in Virginia are ALICE, as are 73 percent of young households and 76 percent of single-female-headed households. These are also the same households more likely to work in low-wage, hourly jobs.
The Brookings Institute last year found that Black and Hispanic workers and women are over-represented in the low-wage workforce.
Stephanie Hoopes, national director of the ALICE Project, said low wages are “a way to keep these dichotomies going,” preventing young families and families of color from being able to save, access good financial tools or build generational wealth.
They are also the families that have been left more vulnerable to the COVID-19 crisis, she said.
Locally, the percent of all households living under the ALICE threshold ranges from a high of 54 percent in Fredericksburg to a low of 26 percent in King George County. Forty-four percent of Caroline households, 37 percent of Spotsylvania households and 29 percent of Stafford households are ALICE.
The report identifies several strategies for improving ALICE households’ chances of improving their situations. These include access to resources such as internet connectivity, public transportation, publicly funded preschool and public libraries—which the report found are especially important for ALICE families because they provide information on social services and job opportunities, free internet and computer access, a range of free programs and community meetings and a general safe space.
Sponsors of the 2020 Virginia ALICE report include the United Ways of Virginia as well as Compare.com, Virginia’s community colleges, Atlantic Union Bank and the Virginia Association of Free and Charitable Clinics.