40 percent of households struggle in Michigan, study shows

By CHAO YAN

Capital News Service

LANSING — While state officials celebrate the plunge of Michigan’s unemployment rate from its 14.9 percent peak in 2009 to around 5 percent today, more than a million families are missing the party.

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

That group 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.

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.

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.

And the basic expenses total has increased since 2007, even as wages have remained stagnant, further squeezing these families.

“This is, in a sense, the new reality,” said Lou Glazer, the president of Michigan Future Inc., a nonprofit non-partisan think tank. “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.”

“The number 40 percent is really high,” Glazer said. “This is a lot of folks. It’s hard to look at the report and say it’s some marginal groups.”

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 what the United Way calls the “Household Survival Budget” for a family of four.

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  Department of Health and Human Services has been working to help struggling families through the 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 possible 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 get 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 support job growth in stressed areas.”