Nearly 40% of Michigan households struggled to pay for basic needs during the pandemic, report says ⋆

When the COVID-19 pandemic hit in 2020, Kyra O’Guinn had been working as a bartender. 

As the country was engulfed by sickness, O’Guinn, a Detroit native, watched as the world around her shuttered, including her workplace. It would be months before she was finally able to access unemployment.

Then, like families across the country, O’Guinn went on to receive the expanded child tax credit temporarily provided by the federal government as part of a COVID-19 relief deal in 2021. That expanded tax credit, which has since ended nationwide, allowed more low-income families, including those with no income at all, to claim up to $3,600 for each child up to age 6, and up to $3,000 per child ages 6 to 17. For the first time, families received the child tax credit funds in monthly installments. 

“Trying to piece our lives back together after the pandemic really left us struggling,” O’Guinn said. “So with the child tax credit, I was able to do a lot of things that I wasn’t necessarily able to do prior to that.”

When we better understand the depth and breadth of Michigan residents who are struggling to make ends meet, we can all do more to ensure that those who are in need are receiving support.

– MAUW President and CEO Hassan Hammoud

With that money, the mother of two was able to pay for a tutor for her daughter, who struggled while attending kindergarten online during the first year of the pandemic, as well as for “extra groceries in the house because more kids were home.”

It is these pandemic-era social programs that provided lifelines for families across Michigan, the Michigan Association of United Ways (MAUW) said during a press conference in downtown Lansing on Wednesday. Now, however, COVID-related programs like the expanded child tax credit and food assistance have disappeared in the country. 

That does not bode well in a state where 39% of the state’s population — about 1.6 million households — were unable to pay for such basic needs as rent, food and childcare in 2021, according to a report released by the MAUW on Wednesday. 

During a press conference that included comments from O’Guinn, the MAUW and its research partner, United for ALICE, unveiled the 2023 ALICE report, a study of the approximately 1.6 million Michiganders who were struggling to make ends meet as the pandemic raged in 2021. ALICE stands for “Asset Limited, Income Constrained, Employed,” or those who are working and live above the federal poverty line but cannot afford basic needs.

Included in that 1.6 million were the 525,754 Michigan households living in poverty and another 1.04 million families defined as ALICE homes. 

MAUW President and CEO Hassan Hammoud speaks during an April 26, 2023 press conference unveiling the Michigan Association of United Ways’ 2023 ALICE report. | Screenshot

“This report provides the first look at the extent of financial hardship in Michigan since the COVID-19 pandemic began,” MAUW President and CEO Hassan Hammoud said. “The ALICE report is a critical tool for providing the data and information needed for policymakers in Michigan to make informed decisions.”

Coming on the heels of a little more than three years of the pandemic, Hammoud pointed out that this data paints a picture of a state where an increasingly financially stressed population is attempting to rebuild from COVID as social safety nets are disappearing, despite poverty experts across the country advocating for these pandemic-era programs to become a permanent part of federal public policy.

“When we better understand the depth and breadth of Michigan residents who are struggling to make ends meet, we can all do more to ensure that those who are in need are receiving support,” Hammoud said.

The need to alleviate the deep financial challenges facing nearly 40% of the state’s population is no small feat, but it is crucial, said O’Guinn — who, along with her husband, have both worked full-time jobs but have still known what it is to not be able to afford basic necessities. 

“I believe that with the price of everything going up, from rent to childcare to groceries, it’s pushing more families to that brink of ALICE,” O’Guinn said. “It’s hard, very hard.”

The number of Michigan households unable to afford the basics grew by about 62,000 during the first two years of the COVID-19 pandemic, resulting in 1.6 million households struggling to make ends meet financially, the MAUW report said.

According to the report, a family of four with an infant and a preschooler needed to earn $72,792 to live and work in Michigan in 2021. The child tax credit helped to soften that blow, bringing that down to $59,016, the MAUW reported. In contrast, a family of four would have to earn $26,500 or less to meet federal poverty guidelines. This, MAUW explained, left those earning just over $26,500 and about $59,000 to be ineligible for a variety of federal programs that assist low-income families but still unable to pay for needs like rent and food.

Now, Hammoud and Kim Trent, deputy director of prosperity at the Michigan Department of Labor and Economic Opportunity (LEO), said it’s time to further implement policies that will close that gap.

“To ensure every Michigander has access to economic opportunity and prosperity, we are using the latest data from the ALICE report and working with partners across the state to deliver real solutions that make sure people in our state aren’t struggling to put food on the table or make ends meet for their family,” Trent said. “LEO and the Michigan Poverty Task Force will continue to focus on efforts that lift Michiganders out of poverty and above the ALICE threshold.”

Kim Trent, deputy director of prosperity at the Michigan Department of Labor and Economic Opportunity, speaks during an April 26, 2023 press conference unveiling the Michigan Association of United Ways’ 2023 ALICE report. | Screenshot

Gov. Gretchen Whitmer created the Michigan Poverty Task Force in 2019; the group works to identify ways to address economic challenges in the state.

Trent also emphasized that the report highlights the stark racial and gender inequities in the state. Black and Hispanic households, as well as households led by single women with children, are significantly more likely to fall under the ALICE threshold.

According to the report, 59% of Black and 44% of Hispanic households fell below the ALICE threshold in 2021. That compared to 36% of white households. Households headed by single women had among the highest rates of hardship, with 71% of those households being unable to afford basic needs in 2021.

MAUW also points out in its new report that, of the 20 most common occupations in Michigan in 2021, 70% paid less than $20 per hour. According to the Massachusetts Institute of Technology’s “living wage calculator,” one adult with one child needs to make $36.81 per hour to earn a living wage. Two adults who are both working and have one child need to earn $20.40 per hour to make ends meet. 

MAUW said a “household survival budget” where basic needs can be met entails a family with two adults and two children earning a combined wage of $29.51 per hour.

The MAUW report points out that most of the jobs in the state’s 20 most common occupations saw an increase in the median wage. For example, the median wage for cashiers increased by 4% to $11.38 per hour in 2021. 

“But given that the wage was low to begin with, cashiers still had the largest percentage of workers who lived below the ALICE threshold in 2021,” the MAUW report says.

The occupations with the highest percentage of workers below the ALICE threshold in Michigan in 2021 were cashiers, personal care aides, fast food and counter work, cooks, laborers and movers, and waiters and waitresses.

Bethany Broom-Dombrowski, who once lived below the ALICE threshold as a 23-year-old single mother working as a full-time teacher earning about $30,000 per year, said her financial struggle left her feeling as though she “was on a never-ending marathon living paycheck to paycheck.

“Trying to achieve financial stability can be exhausting,” she said. 

Broom-Dombrowski credits government programs, like Medicaid and food assistance, for helping her to be able to land where she is now: someone with a Master’s degree who’s working full time while also owning a small business. Currently, she works full time for the United Way of South Central Michigan, where she helps low-income families with tax preparation. There, she sees on a daily basis the challenges that the ALICE population faces. 

Bethany Broom-Dombrowski speaks during an April 26, 2023 press conference unveiling the Michigan Association of United Ways’ 2023 ALICE report. | Screenshot

“I can’t tell you how many times per week the United Way receives calls asking if we have any programs for gas gift cards because they need it to get to their current place of employment, or they’re starting a new job and they need the funds to travel,” Broom-Dombrowski said.

Advocates involved with the ALICE report said on Wednesday that a statewide coalition of government officials, policy makers, business owners, nonprofits, and others will need to work together to address, and ultimately dismantle, the challenges faced by those living below both the ALICE and federal poverty thresholds.

“All businesses should be concerned about the ALICE community,” said Carolyn Bloodworth, Consumers Energy’s executive director of corporate giving. “Economic instability among our state’s residents impacts all of us.”

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authored by Anna Gustafson
First published at https%3A%2F%2Fmichiganadvance.com%2F2023%2F04%2F27%2Fnearly-40-of-michigan-households-struggled-to-pay-for-basic-needs-during-the-pandemic-report-says%2F