TRI-CITIES, Tenn. – The typical Tri-Cities family has an average household income of $66,773, according to the Census. That is about 6% less than what the typical U.S. family earns. But neither reach the level respondents to the Gallup poll says an average family needs to get by.
The Gallup poll tracks a SmartAssets, study that said the average worker needs at least $68,4999 in after-tax income to live comfortably. Here in the Tri-Cities Combined Statistical Area (CSA) the median income for a male full-time worker is $50,847. For a female full-time worker, it’s $40,544. The median income means half of the workers earned more and half earned less. That means many don’t have the SmartAssets’ number in after tax income for the targeted comfortable standard of living.
According to a report in The Hill, the level set by Gallup poll and the SmartAssets study points to the same conclusion: Many people are not making enough to attain a decent standard of living.
Salaries on the local and national level have lagged inflation. A surge of new residents that balances the Tri-Cities’ natural population loss and a job creation trend heavily tilted to lower-wage service workers is changing what locals need to maintain a comfortable lifestyle and housing.
A recent report based on the MIT Living Wage Calculator said the average family spends half of its after-tax income on basic living expenses, 30% to discretionary spending and 20% to savings and debt. The Calculator’s local formulas puts the annual living wage income for a two-person household with one child at almost $70,000. Looking at those numbers is appears a growing number of locals are falling behind.
Another report released recently by the United Way of Greater Kingsport mirrors the same condition in the SmartAssets report and Gallup poll. The report focuses on people with jobs that pay $20 an hour or less in a category called ALICE, Asset-Limited Income-Constrained and Employed.
“It’s a great acronym to describe those that are above the poverty level but still really struggle paycheck to paycheck to get by,” said Dannelle Glasscock, executive director of United Way of Greater Kingsport. “They’re only one emergency away from not being able to make ends meet.”
Dannielle Glasscock, United Way executive editor, told the Times-News, “It’s a great acronym to describe those that are above the poverty level but still really struggle paycheck to paycheck to get by. They’re only one emergency away from not being able to make ends meet.”
According to the 2023 ALICE report, 46% of Northeast Tennesseans have incomes below what is needed to survive in the modern economy. For a family of four, that’s an hourly wage of about $29. “75% of our jobs in our community are in this ALICE category,” Glasscock said.
Two of the primary factors adding to the spike of economic distress are rents and home prices. Some local rents have increased by over 35% since the pandemic. Landlords have eased up a little, but rents are still raising faster than the inflation rate. And with the current housing shortage, the only option many have is to suck it up and pay the higher rents.
Existing home prices, which remain a bargain when compared to many other areas, have increased by more than 50% since the pandemic.
The existing housing market pinch has hit the affordable and workforce housing inventory hardest. The move-up market sales and pending sales are higher than they were last year. The luxury market has cooled but has a better growth picture than the affordable housing market. A localized version of a National Association of Realtors (NAR) and Realtor.com analysis estimates the region needs a little over 500 affordable homes to bring just that segment of the market to balanced conditions.
Discussions and awareness of the effects of a shortage of workforce and affordable housing are heating, but it’s not the type of situation that can be quickly resolved.
Meanwhile, local wages are backing off some of the gains made last year. The labor market is still robust, but the job creation growth rate has gone flat. And while the region’s unemployment rates garner most of the public attention – they’re at all-time lows – the labor force participation rate and wage growth are getting increasing attention. Meanwhile, some residents are making the tough choices of what they can continue to afford for their version of a good standard of living.