Struggling in Michigan

Study: 40 percent of households battle to meet basic needs

(Journal graphic by Selena Hautamaki)

LANSING — While state officials celebrate the plunge of Michigan’s unemployment rate from its 14.9 percent peak in 2009 to around 5 percent, nearly half of Michigan families are still struggling to meet their basic needs.

Some 40 percent of Michigan households, or 1.53 million, are considered to be either living in poverty or are among the state’s working poor, according to a report from the Michigan Association of United Ways.

That figure includes both the 15 percent of households living beneath the federal poverty level and the 25 percent of struggling households that earn too much to meet poverty standards but not enough to afford basic household needs. Employed people who can’t afford necessities are referred to in the report with the acronym ALICE — “Asset Limited, Income Constrained, Employed.”

The United Way, a nongovernmental health and human services provider, reached these conclusions after studying income and employment in the state from 2007 to 2015. The ALICE report, launched in 2014, was updated this month to include more recent findings.

“The number 40 percent is really high,” said Lou Glazer, the president of Michigan Future Inc., a nonprofit nonpartisan think tank. “This is a lot of folks. It’s hard to look at the report and say it’s some marginal groups.”

Upper Peninsula counties show rates at or above the state average, with 41 percent of households in Marquette County earning poverty- or ALICE-level incomes. In Alger County, it’s 50 percent; Baraga and Schoolcraft counties, 52 percent; and Luce County, 55 percent.

According to the report, the average 2015 cost for necessities including housing, child care, food, health care and transportation for a family of four ranged from $43,920 in Osceola County to $64,320 in Macomb County — well above the family federal poverty line of $24,250.

Families have been squeezed even further by a disproportionate rise in the cost of basic expenses.

While the federal poverty line for a single person was $11,770 in 2015, the bare-minimum Household Survival Budget for a single person was estimated to be just over $18,000, according to the report.

The United Way’s estimated Household Survival Budget increased by 18 percent from 2007 to 2015, while the rate of inflation was 14 percent.

“This is, in a sense, the new reality,” Glazer said. “Even with the stronger economy in Michigan, you have a lot of jobs that don’t pay enough and simply no evidence showing it’s going to be better.”

According to the report, 62 percent of jobs in Michigan pay less than $20 per hour, with 69 percent of those paying less than $15 per hour. That means nearly 43 percent of jobs pay well below the Household Survival Budget for a family of four, which estimates a needed $28 per hour in full-time wages.

In the survival budget for a family of four, child care accounts for 24 percent of the family budget. Yet for many ALICE households, 24 percent of earned income is not enough to pay for even home-based child care, the least expensive organized care option, according to the report.

“When parents cannot work due to limited or inaccessible child care, consequences are two-fold,” the report states. “The child may not gain pre-learning skills necessary for success in kindergarten and beyond, and the parent has to forgo work, limiting future earning potential.”

For working folks who are earning a limited income, education might be the best bet, said Rex LaMore, the director of the Michigan State University Center for Community and Economic Development. Opportunities to learn new skills can help people increase their incomes.

“That’s really the only ladder that has been historically successful,” he said.

The Michigan Department of Health and Human Services has been working to help struggling families through primary and secondary schools since launching its “Pathways to Potential” program in 2012.

The program has more than 200 partner schools, according to Erica Quealy, a marketing specialist for the department.

“We work with parents to make sure they have assistance that they need to help keep their families healthy,” Quealy said. “We don’t directly support education, but what we are doing is helping children meet financial needs so they have the basic necessities they need to thrive and be successful in school.”

LaMore said another way to help working poor families is to support jobs that pay a living wage and that provide workers with an income to meet their basic needs. LaMore said the traditional economic development tools in the state have been linked to job skills, where “the higher level of skill you get, the more wages you will be paid.”

“The unfortunate consequence of that is the potential for supporting individuals who have limited skills gets left behind,” LaMore said. “So the policymakers need to realize the importance of developing an alternative community or economic strategy, really targeting the network of working folks and policy that supports job growth in stressed areas.”

To learn more about The Alice Project, or to download the report, go online to www.uwmich.org/alice.

Mary Wardell can be reached at 906-228-2500, ext. 248. Her email address is mwardell@miningjournal.net.