For Judith Graves, the battle to stay in Arlington is one in which small victories are measured monthly, each time she scrapes together enough money to pay the rent.

Graves, 46, a single mother with two children at home, is a custodian at Patrick Henry Elementary School. She takes home about $600 a month. Despite help from a housing subsidy program, she still spends more than 65 percent of her income on rent for her sparsely furnished two-bedroom apartment in South Arlington.

"It's all I can do to just keep up," said Graves, who said she stays in Arlington because she can't save enough money for a deposit on an apartment in a less expensive suburb. She also wants her 9-year-old daughter, Tyna, in Arlington's well-regarded school system.

"For me to live in Arlington, I have to watch every penny," Graves said. "No cable TV . . . no eating out. It's a big deal when Tyna gets a new pair of shoes."

Graves is among thousands of low- and middle-income Arlington workers who are struggling to keep up with soaring rents in the county, where redevelopment along the Metro corridors and rising land values have increased rents by nearly 42 percent since 1979.

During the same period, the median income for Arlington workers has risen by only 7 percent, and thousands of lower-income workers have abandoned the county for less expensive areas of Northern Virginia such as southern Fairfax, Prince William and Loudoun counties.

Arlington officials, fearing that a labor shortage in service industry and other blue-collar jobs could begin to damage the area's economy within a decade, have begun to examine ways to try to stem the flow of workers from the county.

"It's a critical situation that isn't going away," said Arlington County Board Chairman Albert C. Eisenberg, noting that less than 16 percent of Arlington's labor force now lives in the county, compared with about 25 percent in 1980.

"If there aren't enough people around to fix things that need to be fixed and clean things that need to be cleaned, you've got a problem that reaches across the entire community," he said.

A recent study of Arlington's labor force by a panel of county business and community leaders said Arlington's shrinking supply of affordable housing is the largest factor in the county's labor shortage.

Ernst Volgenau, president of SRA Corp. and chairman of the panel, said the county should examine offering more incentives to builders and landlords to provide low-cost housing. He also said businesses should be encouraged to help their employees pay for housing.

Volgenau said Arlington's continued reliance on out-of-county residents to fill service industry jobs could be disastrous as surrounding counties such as Fairfax become more expensive, forcing workers to even more distant suburbs.

"No one expects Arlington to become a ghost town . . . but there could be some real problems in getting people to fill the most basic jobs," said Volgenau. He said the problem could lead to escalating taxes for residents if enough companies decide the cost of doing business in the county is too high.

The panel also recommended that the County Board appoint a labor force coordinator to deal with housing, transportation, day care and other problems that drive blue-collar workers from Arlington.

The board is expected to make such an appointment soon. It also is considering a proposed county housing policy that would, among other things, set up a task force to help form partnerships among Arlington developers, businesses and nonprofit organizations to create more low-cost housing.

John Sharkey knows about falling behind. His monthly take-home pay is about $1,200. The rent on his one-bedroom apartment near Columbia Pike was $710.

Sharkey, 23, a department store clerk, said he gave up on Arlington after he realized he "wasn't getting anywhere.

"I'd watch my expenses and make the rent okay and pay the bills, but I wasn't able to save anything," Sharkey said. "It was like running on a treadmill . . . . Knowing you can't save any money to improve your situation is just really depressing."

Sharkey, who moved to Arlington after attending college, recently left the county for a $550-a-month apartment in Manassas that has more room. "I'm saving for a new car now, and things are looking up," he said. "I hated to leave Arlington, but I just had no choice. I don't know how some people there do it."

Judith Graves, who last winter often walked more than a mile to work and to a grocery store in freezing weather to save a few pennies, said she is determined to cope with Arlington's challenges. Although she can barely save a few dollars each month, she fantasizes about owning a small home in the country.

"I still have my dreams," she said. "I can't ever let go of those."

---- MEDIAN MONTHLY PAYMENTS -----

Unit Size......September 1987...February 1989...February 1990

Efficiencies...$535............. $565............$585

One bedroom.... 602.............. 595............ 645

Two bedroom.... 690.............. 773............ 795

Three bedroom.. 778.............. 908............ 950

SOURCE: Arlington County Department of Community Planning, Housing and Development.