More than a quarter of Virginia households are at risk of becoming economically insecure, according to a report published Monday by The University's Weldon Cooper Center for Public Service.\nOn average, the report stated, Virginia families require two times the federal poverty threshold in income to be economically secure.
The report measures economic security by income adequacy - meaning that households earn enough to pay monthly bills - and asset adequacy - or the cash needed for "short-term financial demands such as job loss." These criterion better reflect the state's economic well-being than the federal poverty threshold, the report stated, because the poverty threshold does not account for the rising costs of household necessities other than food. The poverty rate in Virginia is the 39th lowest in the country, but that figure does not tell the whole story.
"What we can definitively say is there is a large gap between what it takes to meet your monthly payments and the poverty level," said Rebecca Tippett, the researcher of the report.
Furthermore, the threshold is a national standard, and therefore does not account for regional variation. A larger poverty gap has been detected in Northern Virginia, Richmond and the Hampton Roads area, Tippett said.
"In Northern Virginia, the average household needs nearly three times the federal poverty income to get by, so for a family of four, that is $66,000 compared to the federal poverty line just under $22,000."
Tippett began looking at regions and aggregating data six to seven months ago. She created an estimate of Virginians' financial well-being using the 2007 Survey of Consumer Finances and 2006-08 American Community Survey data.
That data reflects the state of the economy before the recession, and Tippett believes they suggest even more families may be suffering now.
"The numbers I report are a very conservative estimate," Tippett said. "Almost 30 percent of households don't have enough to weather the economic recession."
One step toward economic security is gaining the necessary financial knowledge to compute a basic budget, Tippet said. She hopes that sort of knowledge will help to increase income and asset adequacy throughout the state.
Others charge that the economy is improving throughout the state, however. Tippett's report was published one day before Gov. Bob McDonnell announced a 12.6 percent revenue growth in January combined with a drop in unemployment.
"The increases in revenue growth and reductions in unemployment are signs that Virginia is beginning to emerge from the recession and that our fiscally responsible management is making a positive impact on our economic recovery," McDonnell said.
Tippett said these findings do not discount those in her report.
"What I think my study and I personally argue for is that one indicator doesn't give you the whole picture," Tippet said. "Looking good in many respects doesn't mean some people are not struggling."\nAlthough her findings may seem grim, Tippett believes the commonwealth's situation is not dire.
"If you look at Northern Virginia, over 50 percent of adults have a bachelors degree or higher," she said. "In general, you are going to see that Virginia probably looks better than many other states, in part because we have such a high proportion of high education, high-income households"
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