CORONAVIRUS

Iowa's low-income families hurt most due to pandemic

#x201c;I think we knew, or had a hunch, that lower-income families were being unevenly affected by the pandemic, and thi
“I think we knew, or had a hunch, that lower-income families were being unevenly affected by the pandemic, and this study this reinforced that,” says Kristin Roberts, United Way of East Central Iowa CEO. (Liz Martin/The Gazette)

Iowa’s low-income families are some of the hardest hit when it comes to financial stressors of the coronavirus pandemic.

More than half of Iowa’s low-income respondents reported loss of income, increased expenses and/or struggling to pay for basic essentials due to the COVID-19 pandemic, according to a survey released Friday.

The study, by United Way of Iowa and researchIQ at the University of Northern Iowa, identified the three main concerns among respondents as:

• A second wave of virus activity and closures

• A household member contracting COVID-19

• Mental health issues.

Families with household incomes below $50,000 also reported significantly higher concerns about paying for food, utilities and rent or mortgage.

“I think we knew, or had a hunch, that lower-income families were being unevenly affected by the pandemic, and this study this reinforced that,” said Kristin Roberts, president and chief executive officer of United Way of East Central Iowa.

The study, Roberts said, divided respondents into three socio-economic statuses — those who live below the federal poverty line, those who earn a gross income above the federal poverty line and up to $50,000, and those who earn more than $50,000 gross income.

“That’s how we were able to see that it’s those living below the federal poverty line and those in-betweeners — what we call the cliff-effect families, who are suffering the greatest impacts as the result of the pandemic,” she said.

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The current federal poverty line, according to Roberts, sits at roughly $1,040 gross monthly income for a single adult or $1,400 gross monthly income for a household of two or more people.

The term “cliff-effect family,” Roberts said, describes those who are living above the federal poverty line but make less than $50,000. In “normal times,” she said, thy may make enough money to support their families and make ends meet, but should something go wrong — the water heater breaks, for example, or hours get cut at work or a derecho storm tears the roof off their house — and their resources become depleted.

The survey asked respondents several questions about their financial status before, during and since pandemic shutdowns, Roberts said. Results showed that about 75 percent of Iowans pre-COVID-19 had income from a job in which they were able to work more than 35 hours per week.

“But during COVID, that number has dropped to 66 percent — that’s an eight-point drop — so now we have fewer people in the state who have that primary source of income as a job over 35 hours per week,” Roberts said.

As a result, those relying on unemployment payments as the primary source of household income rose from 1 percent pre-pandemic to 11 percent at the time of the survey, especially among those in their 20s and 30s.

In addition, the study showed that the percentage of Iowans who could not cover one month of expenses increased from 18 percent before the pandemic to 31 percent at the time of the survey, which was conducted Sept. 20 through Nov. 2.

Moreover, 6 percent of respondents indicated child care issues made them unable to work, and an additional 10 percent reported taking care of children required them to work reduced hours.

Extrapolated over Iowa’s total workforce of 1.5 million workers, researchers said the study suggested approximately 90,000 Iowans are not working at all and another 150,000 are not working as much as they could due to child care issues.

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As a result, community resources that offer financial assistance are seeing a significant increase in the needs services and in the length of time that help is needed.

Client shift

“The need has increased drastically,” said J’nae Peterman, director of housing and homeless services with Waypoint Services in Cedar Rapids. “We see that those who are very low income are losing housing and unable to identify new housing.

“Those that are moderately low income, that in the past had resources to self-resolve, are unable to do so and are seeking services or entering homelessness for the first time.”

As a result, Peterman said Waypoint has seen a shift in clientele — instead of a majority of those seeking help being homeless or previously homeless, the households that are now requesting services are nearing homelessness because they are facing eviction or unable to meet their financial obligations.

“That’s one the big things we are seeing that is different this year, is that we are seeing people needing help who have never had to apply for assistance before in their life, but they have been so substantially impacted by either the pandemic or the derecho that they’re looking for assistance,” said Ashley Balius, community outreach and assistance director for Linn County Community Services.

That agency manages the county’s general assistance services.

There are many who still are employed, she added, but find they are in need assistance — even if it’s just short-term assistance — because they have either been ill with COVID-19 or they had to quarantine for two weeks and therefore lost a portion of their income.

“So they’re losing half a month of income or more because they’re sick and can’t work or they’ve been exposed to the virus and then have to quarantine for days,” Balius said.

General Assistance serves individuals and families in Linn County who are experiencing financial crisis. The service offers qualified residents up to $450 in financial aid to cover utility or rent or mortgage payments.

The service also offers up to $1,000 in burial assistance to help with cremation costs.

“That’s another area where we have seen the need skyrocket recently,” Balius noted.

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“So in an average year for general assistance, we provide would provide burial assistance for about 70 to 75 people. And this year, I’m projecting that number is going to be closer to about 125, based on the numbers I’ve seen so far and on the volumes of calls we’ve had regarding that service.”

For many Iowan households, Roberts said the impact of the pandemic could last for years.

“It will likely take months, if not years, for these families who have been taking the brunt of the pandemic to be able to find their way out,” she said. “If you look at the data. for instance, 35 percent of low-income and cliff-effect families took out loans in order to cover basic needs, and 29 percent have used up their personal savings.

“So if you think about what it takes to recover from that — and again, you throw in the unexpected, like your car breaks down or your water heater goes out — and then you add in the storm, it’s just puts people in such a state financial frailty that we’re probably going to see that impact for a while.”

Comments: kat.russell@thegazette.com; 319-398-8238.

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