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September 26, 2019

New Census Income and Poverty Data: Stalled Progress Means Virginia May Begin Next Recession With Poverty Rates That Are Still Elevated From Prior Recession

Incomes remained fairly steady in 2018 for middle-class Virginia households after adjusting for inflation, yet poverty rates remain well above pre-recession levels and income inequality is increasing. Compared to two years ago, median household income is up 1.9% in Virginia to $72,577 in 2018. Although typical incomes in Virginia are not significantly different from when the Great Recession began, they have rebounded 7.6% after adjusting for inflation from when they bottomed out in 2012 due to the lingering effects of the Great Recession. However, there is more work to be done to make Virginia a commonwealth with opportunity for everyone. 

The share of Virginians with incomes below the poverty threshold remains higher than before the recession. Statewide, Virginia’s poverty rate was 10.7% in 2018, up from 9.9% in 2007 and not significantly different than the 10.6% rate in 2017. And the share of Virginia children who are living in households with incomes below the poverty threshold was 13.7% in 2018, indicating that even after 10 years of economic recovery, many Virginia families with children are still struggling to make ends meet. Even as the share of Virginia households with incomes above $200,000 grows compared to a few years ago, more than 1 in 3 households in Virginia have incomes under $50,000 a year. Backwards choices by Virginia’s legislators, such as failing to increase Virginia’s minimum wage even as housing and healthcare costs have soared, have contributed to many working people in Virginia being left behind, while the next generation of Virginians attend schools that have endured a decade of cuts.

And there are significant differences in opportunity both across and within regions. Many parts of Virginia experience far lower typical household incomes than the statewide levels. The metro areas of Blacksburg, Harrisonburg, Lynchburg, and Roanoke all have median household incomes at least $17,000 below the statewide median of $72,577; the Richmond, Hampton Roads, and Winchester areas also have median household incomes below statewide levels, although less dramatically. 

And over three-fifths of Virginia families with incomes below the poverty threshold have at least one adult in the household who is working. As a result, there are around 266,000 working adults living in Virginia households with incomes below the poverty threshold, which is just $25,465 for a married couple with two children. And Virginians who are Black or Latinx continue to be more likely than white and Asian American Virginians to have incomes below the poverty line. This isn’t by chance – state policymakers have chosen to perpetuate historical inequities by making a child’s access to a high-quality education contingent on their zipcode and county of residence, by failing to protect low-income first-generation college students from predatory lenders, by blocking attempts to raise Virginia’s minimum wage to more reasonable levels, by denying many immigrants access to driver’s licenses, and by refusing to affirmatively take action to reverse the legacy of past discrimination against Black Virginians.

The good news is that state policymakers can turn this around by making new public policy choices. By coming together, we can build a Virginia for All of Us, No Exceptions by investing in strong and healthy families, communities, and democracy. That includes raising the minimum wage to $15 an hour, protecting student loan borrowers, passing paid family and medical leave to support everyone’s ability to care for themselves and their families, protecting those with pre-existing conditions, and much more. 

Federal policymakers can also take action to build opportunity for everyone in Virginia. Refundable tax credits – like the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) – are among the most effective anti-poverty policies on the books. That’s because refundable credits allow filers to receive some or all of the value of the credit, even if the value exceeds their federal income tax owed. About 600,000 of Virginia’s working families receive the federal EITC, and over 400,000 families receive the portion of the CTC provided to families with low incomes. At the federal level, Virginia’s congressional delegation has an opportunity to do more to support families in Virginia by backing the Working Families Tax Relief Act, which would substantially strengthen both credits. Here in Virginia, making the state version of the EITC refundable could also help move already working families out of poverty and, along with raising the minimum wage, could help make work pay for single-parent families facing high costs for child care and transportation. When every family is strong and healthy, we all thrive.


Economic Opportunity

Laura Goren

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