JOHNSTON — The ranks of Iowa households unable to afford the basics grew by more than 20,000 during the first two years of the COVID-19 pandemic, resulting in a total of 459,444 households or 36% struggling to afford the basics by 2021, according to a new report from United Ways of Iowa, its research partner United For ALICE, and state partner, GreenState Foundation.
That calculation includes the 144,427 households in poverty as well as another 315,017 families defined as ALICE (Asset Limited, Income Constrained, Employed), earning above the Federal Poverty Level but less than what’s needed to survive in the modern economy. ALICE families have been overlooked and undercounted by traditional poverty measures. ALICE is 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 from poverty.
ALICE in the Crosscurrents: COVID and Financial Hardship in Iowa shows that the total number of financially insecure households rose by 1% between 2019 and 2021. The number of ALICE households increased by 21,732 during that time. In contrast, there were 1,731 fewer families in poverty.
Iowa ranked 9th in financial hardship among all 50 states, with one of the nation’s lowest percentages of households struggling to make ends meet in 2021.
While job disruptions and inflation delivered significant financial pain, a combination of pandemic supports and rising wages did help to blunt 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 Ways of Iowa CEO, Kelli Soyer. “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 Iowa. We have an opportunity to build on what was learned during the pandemic as ALICE continues to face economic uncertainty.”
“The GreenState Foundation is honored to partner and fund this impactful data as we aim to address the disparities in financial hardship across our state,” said Tara Wachendorf, President of the GreenState Foundation. “The ALICE report provides funders the information needed to assist our neighbors who are struggling and because it breaks down data by county demographics, it allows us to move towards more equitable solutions.”
According to the report, for a family of four with an infant and a preschooler, the annual ALICE Household Survival Budget, which is the basic cost needed to live and work in Iowa, was $75,228 in 2021. The Child Tax Credit and Child Dependent Care Tax Credit helped to soften the blow, bringing the family Survival Budget down to $61,308.
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 Iowa — fell short of affording the family budget by $2,876.
“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 persist in the rates of financial hardship; 61% of Black and 46% of Hispanic households were below the ALICE Threshold in 2021, compared to 34% of white households.
• The young head of households, under age 25, and oldest, over age 65, had among the highest rates of hardship in Iowa, 62% and 46% respectively.
• Single parent households struggled most, with 70% of female head of households and 48% of male head of households could not afford basics in 2021.
• In 2021, 70% of the 20 most common jobs in Iowa paid less than $20 per hour. For low-wage workers, the increase in wages was important for families, while challenges remain. The costs of essential good have outpaced wages for more than a decade, stretching household income.
• In 2021, less than 24% of workers were full-time salary employees. Hourly wage workers are more likely to have fluctuations in income and less likely to receive critical supporting benefits.
To read the report and access online, interactive dashboards that provide data on financial hardship at the state, county and local level, visit United4ALICE.org/ALICECrosscurrents.
About United Way of Iowa
United Ways of Iowa is the membership association of 20 United Ways serving Iowa communities. Together, they raise over $50 Million annually to support programs providing Iowans services in education, financial stability, health and crisis services.
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.
About Green State Foundation
The GreenState Foundation was established in 2022 to assist GreenState Credit Union in improving the quality of life in communities throughout Iowa and Illinois. The Foundation’s vision is to provide its members and communities with solutions to improve financial health and inequities, address the shortage of affordable housing and sustain our environment. Membership to the Foundation also gives free access to financial wellness tools and resources at your disposal. Visit www.greenstatefoundation.org to learn more and join us today as we grow stronger, together.