The financial flexibility that often comes with dual-income households may help explain why some Triangle residents, especially those with low or no incomes, continue to face financial hardships four years after the COVID-19 pandemic began.
As the last of the federal and state governmental assistance programs phase out, more are facing struggles and must rely on local social service agencies to make ends meet.
Stanislav Rabinovich, an associate professor of economics at UNC-Chapel Hill, said that many U.S. households have a male primary breadwinner and a female supplementary income. This provides a level of flexibility in which the woman can “move in and out of the labor market” based on her partner’s job situation, he said.
“But in COVID-19, all of this kind of went out the window,” Rabinovich noted.
Income flexibility, which can be a “source of insurance” for families, was hurt by the pandemic, he said. The pandemic-era recession significantly affected industries that disproportionately employ women and are typically more stable in hard economic times, such as healthcare and education.
Healthcare was hit particularly hard. The Bureau of Labor Statistics reports that 14.9 million people were employed in the healthcare sector in April 2020, down from nearly 16.5 million in February 2020.
This hit to the security of healthcare jobs ripped away financial security for both dual-earner and single-earner households that relied on the industry.
For a while, funding from the government’s assistance programs filled the income gap the pandemic left for two-earner households. It also helped to supplement, or in some cases replace, the sole income relied on in households with only one earner.
As the assistance programs dry up, local social service agencies are dealing with the financial fallout for both types of households.
Yvette Matthews, office and community organizer at the Chapel Hill Community Empowerment Fund, said that their organization saw an influx of clients who turned to government assistance when they lost their jobs during the pandemic. Many of those who lost their jobs worked in healthcare and childcare.
CEF is a non-profit working primarily with fixed, low, and no-income people in the Chapel Hill community. According to Matthews, many of their clients are single mothers and single men, both with and without children.
“Women were hit especially hard,” Matthews said. Even after the pandemic was over, “The jobs that they were looking for paid even less than what they were used to,” she added.
Matthews said the few assistance programs that remain are now more difficult to access.
“You have to really jump through hoops in order to get some type of funding,” she said.
Similar to CEF, the Inter-Faith Council for Social Service also serves low and no-income Chapel Hill and Carrboro residents. For more than five decades, their mission has been “to confront the causes and respond to the effects of poverty in our community,” according to their website.
Stephani Kilpatrick, IFCSS development and communications manager, said that her organization has seen an increase in need since the pandemic.
“While most of the country has transitioned to recovery mode, our neighbors on fixed, low, or no income continue to face crisis,” Kilpatrick said. “Unfortunately, the cost of housing has skyrocketed, making it harder for people to afford other basic needs like food, medications, and clothing.”
Like low-income families, middle-income families have also struggled. However, many of these families are seeing signs of improvement, according to financial experts.
Brenda Young, a financial advisor in North Carolina for over 24 years, says she has many clients that are “not really low-income, or they’re not really struggling, but they’re not really able to put away money.”
She noted that “With the economy and prices rising the way that they are, it’s really hard for a family to have one income.” Young added that most of the people she offers her advisory services to “have at least a dual income, if not more.”
Even as employment numbers have recovered, according to data collected by BLS, Young noted that inflation and the high cost of borrowing are two factors that have hindered her clients’ financial prospects.
However, lowering inflation figures and anticipated interest rate cuts may bring some needed relief.
“Right now, we’re digging ourselves back out of it,” Young said.
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