Low-income families in Iowa have suffered disproportionately in their ability to pay for basic essentials during the pandemic, according to a new report released by United Ways of Iowa. 

More than half of the low-income families surveyed reported loss of income or increased expenses due to COVID-19, according to the study, which was conducted by researchIQ at the University of Northern Iowa. 

The three main concerns reported by respondents were a second wave of virus activity and closures, a household member contracting COVID-19, and mental health issues. Families with household incomes below $50,000 reported significantly higher concerns about paying for food, utilities and rent/mortgage.

United Ways of Iowa is the membership association of the 24 United Ways serving Iowa communities. Together, they raise over $60 million annually to support more than 800 programs that provide services in education, financial stability, health and crisis response. 

“This study grew out of our prior work to elevate the needs and concerns of families living below the ALICE threshold of $50,000 annually for a family of four,” said Deann Cook, executive director of United Ways of Iowa. ALICE, an acronym for asset-limited, income-constrained, employed, is a new way of defining and understanding the struggles of households that earn above the federal poverty level, but not enough to afford a bare-bones household budget. 

“These are families who are not able to meet basic living expenses on a regular basis, despite being employed,” Cook said. “We were especially interested in hearing from these Iowans and learning how their financial concerns have evolved during the COVID disruptions.”

The survey asked households about their financial status before, during and since COVID shutdowns. The study period was Sept. 28 through Nov. 2, before the current spike in cases in Iowa over the past several weeks. The response received met the researcher’s goals of a representative sample of Iowans in terms of geography, age, income levels and ethnicity. 

The study identified several major themes:

– COVID has had an uneven impact on Iowa families. Respondents with household income below $50,000 were significantly more likely than higher income groups to report loss of income or increased expenses since the pandemic began. These respondents were most likely to report working in occupations that have experienced the greatest disruptions from COVID, including hospitality, food service, retail and health care or social assistance.

– Many Iowa households’ financial situations are fragile. The percentage of respondents who indicated they could not cover one month of expenses before COVID was 18%; it increased to 31% at the time of the survey. Most respondents received a federal stimulus payment and used it to cover household expenses like food, housing and utilities, but reported it was not enough to cover even one full month of expenses.

– COVID-19 has adversely affected Iowa’s workforce, particularly in the area of child care. Six percent of respondents indicate they continue to be unable to work at all due to child care issues, and an additional 10% indicate they are working reduced hours due to child care issues. Extrapolated over Iowa’s total workforce of 1.5 million workers, approximately 90,000 are not working at all and 150,000 are not working as much as they could due to child care issues.

– There is a growing population of “newly needy.” These are Iowa households who were able to keep their financial head above water pre-COVID, but now find themselves struggling to navigate resources that they’ve never had to use before like unemployment and food assistance. The percentage of respondents who reported the household’s primary source of income was a job or jobs of more than 35 hours a week was 74% pre-COVID, but dropped 8 points to 66% at the time of the survey. Those relying on unemployment payments as the primary source of household income rose from 1% pre-COVID to 11% at the time of the survey. This finding was particularly true of people in their 20s and 30s.

“These themes are consistent with what our local United Ways are experiencing in their communities and what we’re hearing from the 130,000 calls received on Iowa 211 so far in 2020,” Cook said. “This study contains an extraordinary amount of data about the experiences of Iowans that United Ways will use to shape our advocacy efforts and community investments. We are eager to share this new data with others interested in determining opportunities to support those most affected by COVID.”

A summary report of the COVID-19 Financial Impact Survey can be found at this link.