A new report found Lubbock families were more financially stable during the worst of the COVID-19 pandemic, in part because of temporary help from the government. But experts worry that positive trend will soon reverse and more people will struggle to make ends meet.
The report is a collection of data from 2021, focusing on an economic threshold for the population referred to as ALICE, or Asset Limited, Income Constrained, Employed. These households earn enough to be above the federal poverty level but often don’t qualify for public assistance, or have a financial safety net in emergencies.
In Lubbock County, the number of households under the ALICE threshold decreased by 4% from three years earlier, to 44% in 2021.
Amanda McAfee, vice president of community impact for the Lubbock Area United Way, said despite a regular income, many of these families still struggle to afford necessities.
For two-parent homes with two kids, the report estimated the yearly cost for an ALICE family to live and work in Lubbock County in 2021 was $69,432. Even with the support that came in response to the pandemic, much of which is now gone, the report states two workers earning full-time salaries in common ALICE positions fell short of affording the family budget by more than $16,000.
McAfee said families along the ALICE threshold are often the “silent population,” generally overlooked and undercounted in financial stability efforts.
“In Lubbock County, 80% of our single female-headed households are under the ALICE threshold,” McAfee said. “If you go into the South Plains, into our surrounding counties, 85% of single female-headed households are struggling.”
Texas ranked 32nd in financial hardship out of all 50 states, with one of the nation’s highest percentages of households struggling to make ends meet in 2021, according to the report.
“It's around 30% of these families that actually have the ability to have savings, so you're talking about emergency funds, but you're also talking about retirement funds, and college funds. But that's not happening for these groups,” McAfee said. “In fact, if you look at that group that's over the ALICE threshold, only 74% of those households on average in Texas, have savings.”
Despite the decrease in Lubbock’s number of ALICE families, McAfee said there are important things to remember when looking at these numbers.
“That data comes from 2021, where folks were getting the earned income tax credit for kiddos throughout the year, there were stimulus payments,” McAfee said. “So households were doing a little bit better because of those payments that we were receiving from the government during that time; and getting that tax credit to roll out during the year instead of just coming in when we filed taxes, so that was helping families.”
More households are below the federal poverty level in Lubbock. Recent cuts to public assistance, both COVID-19 help and traditional benefits, are making things harder for people across the economic spectrum.
McAfee said the financial impact of these ALICE families on all parts of the economy is consistently understated. Many people in this population work in service or caregiving industries.
“When we're saying it's 44% of our community that's struggling, we need to look at that as a whole because that affects the workforce, that affects our local economy, our school districts - that affects everything,” McAfee said.
According to the report, many jobs taken by members of ALICE families saw around 10% increases in wages. However, the essential cost of resources increased by about 10% as well.
“We want our local businesses to be successful. We want our local businesses to be able to care for their employees and care for their clients,” McAfee said. “All of those things matter, but also the success of households matter. And so we really have to look at it from both sides.”
These ripple effects of inflation continue to be seen in West Texas as supply and property prices increase the cost of housing, making it harder for families who may not have struggled financially before. The report describes a stigma around asking for help, something McAfee said the Lubbock Area United Way has dealt with before.
“One of the things that happened for our agencies, at the beginning of the pandemic, is they had so many families coming to them saying, ‘we've never asked for your help before,’ not even really knowing how to ask for help,” McAfee said. “But we were all put in the situation where you had to ask for help.”
McAfee said United Way agencies will continue to offer services to help South Plains families ease their budget struggles, like affordable childcare through programs like the Boys and Girls Club or Early Learning Centers; or affordable mental healthcare through Family Counseling Services.
You can read the full ALICE data for Texas and download the latest report here.
