Report: Half of SWVA households earned less than basic living cost in 2018

United Ways of Virginia study says income inequality is increasing in state.

Published November 19, 2020 by Sydney Lake

More than 50% of Southwest Virginia households in 2018 lived in poverty or earned less than the basic cost of living, according to a report released Thursday by the United Ways of Virginia.

Using the “ALICE” acronym — asset-limited, income-constrained and employed — the United Ways of Virginia reported that 51% of Southwest households were under the ALICE threshold in 2018, compared to 39% across Virginia. Full data is not in for this year, but with the COVID-19 pandemic and resulting economic crisis, the number of households living in poverty is expected to increase, the report says. 

“These households contribute to Southwest Virginia’s economy by earning, spending and paying taxes, yet they still struggle to make ends meet,” United Way of Southwest Virginia CEO Travis Staton said in a statement. “Even though the cost of living in the region is lower than in the rest of the state, it is higher than what most residents earn.” 

According to the report, the average ALICE household survival budget for a family of four was $78,528 in Virginia in 2018, requiring an hourly wage of $39.26. A single adult would need to earn nearly $15 an hour full-time to cover an annual budget of $29,580.

“The increase in people who cannot make ends meet drives our strategic initiatives across the cradle-to-career continuum for our new model United Way,” Staton added in his statement. “We must invest in our children and youth. This provides a greater return on investment than helping out later in their life, and we are working toward long-term generational change needed for Southwest Virginia.”

Although the Southwest region is collectively worse off than other Virginia regions, localities across the state also have individually high ALICE rates. The state’s highest rates are in the cities of Lynchburg and Radford at 67%; Petersburg at 66%; Dickenson County at 65%; Emporia at 64% and Manassas Park at 63%. The lowest rates are in Loudoun County at 23%; Falls Church at 24%; King George County at 26%; Fairfax County at 28%; and Goochland, Hanover, Stafford and York counties at 29%.

According to the report, approximately 16% of Virginia households — or 514,487 — were on the cusp of the ALICE threshold in 2018, with earnings just above or below it, and the cost of living is growing in urban and rural areas, often driven by the cost of housing. The report notes that there was an 88% decline in affordable rental housing in Alexandria between 2000 and 2018, and Virginia was one of nine states in the nation that experienced widening income inequality in 2018.

Most jobs are concentrated in Northern Virginia, Hampton Roads and the Richmond region, while growth was “sluggish” in rural regions due to an aging workforce and local industries. Low wage jobs — defined as less than the wage needed for two workers to afford a four-person household survival budget — increased from 34% of Virginia’s workforce in 2017 to 44% in 2018. High-wage jobs, meanwhile, declined 22% during the same period.

The report says that raising all Virginia households to the ALICE threshold would benefit the state’s bottom line by adding $107 billion in spending, earnings and tax revenue annually to the state GDP.

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