Nearly half of Michigan children live in households that struggle to pay for basic needs, report shows

Editor’s Note: This article originally appeared in MLive.

By Rose White | rwhite@mlive.com

About 1.5 million Michigan households struggle to make ends meet.

This impacts nearly half of the state’s children, according to a new report from the Michigan Association of United Ways, and financial hardship is starkly divided on race and ethnicity.

The report found that 44% of Michigan children are living below ALICE—households that have an income but struggle to afford housing, food, childcare, transportation and other essentials—including 17% who are under the federal poverty line.

In total, this affects about 1 million Michigan children.

“We kind of assumed this was impacting more kids, but we didn’t know,” said Michigan Association of United Ways President and CEO Mike Larson. “It helps us identify what that real picture looks like for children in Michigan.”

These financial hardships disproportionately affect Black and Hispanic families.

In Michigan, 71% of Black children and 58% of Hispanic children are living in financial hardship, the report shows, compared to about 36% of white children.

“We saw these disparities in our traditional ALICE report,” Larson said. “But this expanded that even more when you’re looking at the number of children especially around race and ethnicity.”

The Michigan Association of United Ways, which serves 35 local United Ways, is publishing a series of ALICE reports from 2019 data narrowed on children, those with disabilities and veterans. The first, on children who face financial struggles, was released last week.

These types of households are becoming a bigger concern as the cost of living outpaces wages. Most jobs pay less than $20 an hour in Michigan, according to the Michigan Association of United Ways, but a family of four needs to earn $32 an hour to afford basic needs.

“It touches (children) in so many other ways other than just a financial standpoint,” Larson said. “We see that in many of our communities across the state of Michigan in populations where financial hardship impacts households and children in a greater capacity than we actually understand sometimes.”

This issue extends to stable housing, education, healthcare and access to internet.

Looking at education, about 37% of preschool-aged ALICE children were enrolled in preschool compared to 58% of those above the threshold, the Michigan Association of United Ways found. Additionally, more than half the 8,050 Michigan teens not in school live in ALICE households.

And last fall, four of ten Michigan ALICE families reported they could not afford enough food to feed their children.

Larson said the COVID-19 pandemic, which drove up unemployment and led to a historic 8.5% inflation rate, only magnified financial issues for many working families. Food costs are climbing, childcare is pricey and gas prices recently topped $4 a gallon.

“We have ALICE families that can’t afford housing close to where they work, so that means they have to find housing outside of the community or further away. Then you take gas prices and what they are today and go: how did they manage and are able to stay employed,” he said. “There’s lot of those types of things that really create roadblocks for families to be successful.”

A key way the Michigan Association of United Ways is trying stem concerns for struggling families is by advocating for a tax credit for low-income workers.

Legislation introduced last year would boost the Earned Income Tax Credit from to an average of $749 for about 740,000 Michigan families. It has bipartisan support including from business groups like the Detroit, Grand Rapids and Lansing Chambers of Commerce that wrote to support it.

“Offsetting some tax responsibility through an expansion of the EITC will help boost earnings for struggling families, providing them an opportunity to step up and out of poverty toward meaningful economic security,” the chambers wrote in a December letter to state officials.

Larson said the Michigan Association of United Ways is also advocating for affordable housing and quality childcare.

“The more that we can educate people on what the challenges are, the better informed they can be on being advocates for children that are struggling,” he said.