BETHLEHEM, Pa. — A new report from the United Way of Pennsylvania confirms what too many Lehigh Valley residents are already experiencing.
Nearly 40% of households are struggling to afford basic amenities, even if they’re working full-time, the study found.
- A new report by the United Way found 39% of Pennsylvania households struggle to afford basic amenities
- The rates are far higher in some Lehigh Valley communities, such as Allentown, Fountain Hill, Bangor and Wind Gap
- The figures may be low. The numbers are based on 2021 data, when COVID-19 relief programs pumped extra money to families with children
Every few years, the non-profit releases its ALICE report, which aims to determine how many people in its communities are living paycheck to paycheck.
ALICE — which stands for Asset Limited, Income Constrained, Employed — determines the cost of modest living expenses in an area, then reviews how many of its households can afford those standards.
The latest report, published this spring, explores living expenses in 2021 as the coronavirus pandemic threw the economy out of whack and inflation skyrocketed.
It found that 39% of Pennsylvanians don’t make enough to cover a basic budget items, including rent, food, transportation, utilities and childcare.
“We are seeing a higher number of households that are struggling financially than we did even during the Great Recession,” United Way of Pennsylvania President Kristen Rotz said in an interview this week.
Valley residents struggle to pay for housing, food
Lehigh and Northampton counties are right around that state average, and the statistics haven’t moved much since the previous report in 2019.
In Lehigh County, 42% of households were struggling to afford the basics in 2021, an improvement of one percentage point from 2019. Meanwhile, 37% of Northampton County households didn’t break the ALICE threshold, an increase of two percentage points.
Things are more dire in Carbon County, which is also served by the United Way of the Greater Lehigh Valley.
There, 48% of households aren’t earning enough to pay for a survival budget, according to the ALICE metric. That’s an increase of 13 percentage points since 2019, according to the report.
As troublesome as that is, the real concern is what lies ahead, said Erin Connelly, the associated vice president of impact for the United Way’s local chapter.
In the years since the data was collected, inflation has continued to outpace incomes. In addition, many of the federal assistance programs rolled out during the pandemic have expired.
Those programs, such as the Child Tax Credit, boosted the incomes of some families by as much five figures.
“Now that we know the pandemic era aid isn't around in the same way it was, we know that number is even higher,” Connelly said.
Household costs
The United Way uses government data to calculate the cost of living in an area, from across a state to the municipal level. It then estimates what a modest budget would look like for different households.
The households with the most expenses by the ALICE formula were families with two adults supporting an infant and a pre-school-aged child. In 2021, those figures look like this:
Lehigh County
- A two-bedroom apartment — $1,166 a month
- Utilities — $292 a month
- Childcare — $1,354 a month
- Food — $1,242 a month
- Transportation — $806 a month
- Health care — $885 a month
- Smartphones $110 a month
- One-time expenses and unexpected costs — $586 a month
- Tax payments — $1,182 a month
- Total annual budget: $91,476
- Total annual budget after pandemic era tax credits: $76,272
Lehigh County households with one working adult had an ALICE survival budget of $32,196 a year.
Northampton County
- A two-bedroom apartment — $1,183 a month
- Utilities — $292 a month
- Childcare — $1,458 a month
- Food — $1,326 a month
- Transportation — $806 a month
- Healthcare — $885 a month
- Smartphones — $110 a month
- One-time expenses and unexpected costs — $606 a month
- Tax payments — $1,234 a month
- Total annual budget: $94,800
- Total annual budget after pandemic era tax credits: $79,596
Northampton County households with one working adult had an ALICE survival budget of $32,880 a year.
Carbon County
- A two-bedroom apartment — $847 a month
- Utilities — $292 a month
- Childcare — $1,245 a month
- Food — $1,128 a month
- Transportation — $806 a month
- Healthcare — $885 a month
- Smart phones — $110 a month
- One-time expenses and unexpected costs — $531 a month
- Tax payments — $1,047 a month
- Total annual budget: $82,692
- Total annual budget after pandemic era tax credits: $68,028
Carbon County households with one working adult had an ALICE survival budget of $32,880 a year.
Uneven impact
The strain isn’t being felt evenly across the region, though. More than half of the residents in many municipalities across the three counties struggle to afford ALICE budgets.
In six municipalities — Banks Township and Lansford in Carbon County, Allentown and Fountain Hill in Lehigh and Bangor and Wind Gap in Northampton County — that number jumped to 60% or more of households.
The report also found that some minority households were far less likely to earn enough to pay for a survival budget.
Across Pennsylvania, 59% of Black households and 54% of Hispanic households didn’t make enough to cover the survival budget compared to 36% of White households.
The rates were more equitable locally — 36% of Black households and 38% of Hispanic households couldn’t afford a survival budget in Northampton County, compared with 30% of its White households.
Some of the biggest drivers of expenses in Pennsylvania are housing and childcare, Rotz said.
At the time, real estate prices were skyrocketing as people were moving out of crowded cities as remote working took root. The higher competition for homes kept would-be homebuyers in rental units, which lead to an apartment shortage that sent rents soaring.
The tight labor market also led workers to reassess their careers. That particularly affected child care, for which wages historically have been low, Rotz said.
To compete, many daycares and preschools have had to raise their rates to attract and retain workers.
“A number of childcare workers have left this field to go on to now higher paying jobs in the retail sector or the service sector," she said. "Childcare providers are having a hard time recruiting enough workers to keep classrooms open."
But affordable child care has its drawbacks, too. While it allows more adults to work at good-paying jobs, it can be at the expense of childcare workers.
The report found child care workers in Pennsylvania were paid an average of $11.26 an hour in 2021. That rate wasn’t enough for a single adult to make pay their bills on a survival budget.
“So many of us rely on the people who work in our childcare centers to make sure that we can go to work and earn the quality of life that we want for our families,” Rotz said.
“But those workers themselves are not able to sustain even a moderate standard of living.”
Stepping up
Rotz and Connelly were in Harrisburg on Tuesday, lobbying state lawmakers to adopt policies to ease the burden on working-class households.
Along with pushing for greater funding for childcare services, they argue Pennsylvania should adopt an earned income tax credit. The credit would provide lower-income households with a lump sum of cash, which could help them keep up with rising expenses.
Closer to home, Connelly said the United Way of the Lehigh Valley has partnered with New Bethany Ministries to form a Housing Advocate Program in the Bethlehem Area School District.
The advocate reaches out to landlords on behalf of working families that are struggling to find affordable housing. About 40 families took advantage of the program in the 2021-22 school year, she said.
Such programs are a particular help for families earning too much to qualify for federal subsidies but not enough to easily afford housing.
A study of Bethlehem’s housing market found that the average rent in October 2022 for a two-bedroom apartment was about $700 more per month than what a survival budget allocated. Market-rate apartments that fell near ALICE levels were basically non-existent, it found.
“For Folks who are under the ALICE threshold, it is just extremely hard to find housing that is affordable,” she said.
