Despite Bigger Paychecks, the Number of Struggling Households Continues to Rise in Southwest Michigan and Across the State
New ALICE Update shows wage growth was no match for inflation after a decade of falling behind
ST. JOSEPH, MI — Though wages for the lowest paid jobs have risen across the country at the fastest rate in four decades, the number of households struggling to get by in Michigan grew by more than 100,000 from 2021 to 2022. As a result, a total of 1.7 million households or 41% were living paycheck to paycheck, according to a new update from Michigan Association of United Ways (MAUW) and its research partner United For ALICE.
That calculation includes the 537,322 Michigan households in poverty as well as another 1,133,874 defined as ALICE (Asset Limited, Income Constrained, Employed), those earning above the Federal Poverty Level but less than what’s needed to survive in the current economy. ALICE workers include child care providers, home health aides and cashiers — those working low-wage jobs, with little or no savings and one emergency from poverty.
ALICE in the Crosscurrents: An Update on Financial Hardship in Michigan shows that while wages were increasing, so too were costs. For a family of four with an infant and a preschooler, the basic costs to live and work in Michigan, excluding tax credits, rose from $72,792 in 2021 to $78,684 a year later. Compounding the issue in 2022 was the loss of up to $15,000 in federal child tax credits and stimulus payments that this family had access to in 2021.
“There is no doubt, bigger paychecks helped, but inflation and the loss of pandemic supports converged to keep ALICE trapped,” said MAUW President & CEO Kaitlynn Lamie. “This latest data is a reminder that while we have made some progress — including expanding our state’s Earned Income Tax Credit and funding 2-1-1, a helpline for any resident struggling with the costs of basic needs — our work is far from over.”
The findings in this one-year period are consistent with a more than decade-long trend: Since the end of the Great Recession, despite some ups and downs, the number of ALICE households in Michigan has been steadily growing. From 2010 to 2022, the total number of households rose by 6%, households in poverty decreased by 6% — and the number of ALICE households grew by 20%.
“The data shows persistent and widespread financial hardship — a red flag that the current system isn't working for ALICE,” said Stephanie Hoopes, Ph.D., United For ALICE National Director. “Current policy has not been enough to break down the barriers that trap ALICE households in financial hardship, from lack of access to housing and child care that’s affordable, to inadequate community supports such as broadband internet."
Additional statewide insights include:
Racial and other disparities persisted in the rates of financial hardship; 63% of Black and 47% of Hispanic households in Michigan were either in poverty or ALICE in 2022, compared to 38% of white households. Additionally, people age 65 and over made up the fastest-growing age group in Michigan from 2010-2022 – and the group with the largest increase (37%) in the number of households struggling to make ends meet.
Child care remains simultaneously one of the highest costs for households with children and a low-paying career ($11.54 median hourly wage) for professionals, leading to child care shortages. According to the October 2023 Household Pulse survey, when families below the ALICE Threshold could not find affordable child care, they often cut work hours (37%) or took unpaid leave (28%) to care for their children.
Food assistance continued to elude many vulnerable families in Michigan. Partly due to the SNAP income eligibility level in the state (200% of the Federal Poverty Level), only 46% of all Michigan households in poverty and 20% of all ALICE households participated in SNAP in 2022.
Heather Cole, Senior Director of Impact Strategies for United Way of Southwest Michigan, says the local numbers are also concerning. “In a critical year of pandemic recovery (2021 to 2022), it doesn’t appear Southwest Michigan fared well as we added more than 1,809 new ALICE households.”
Cole also noted other local insights:
By the end of 2022, the number of ALICE households in Berrien, Cass, and Van Buren counties had risen, resulting in 42% of the population now living paycheck to paycheck.
Though wages went up, costs did, too, making it difficult for the ALICE population to keep pace. For a family of four with an infant and a preschooler, the cost of basics in the three county area rose over 23% from $58,092 in 2021, to $71,784.
The numbers more than a decade later shows an unsettling trend: since 2010 through 2022, the total number of populated households in Southwest Michigan fell by 6.95%, households in poverty remained at 14%, and the number of ALICE households grew by 4%.
“Through the work of United Way’s local impact partners, we can help residents in our area reduce their likelihood of slipping into ALICE designation, or climbing out all together,” says Cole. “We have success stories like Tess Ulrey of St. Joseph that we get to share.”
Tess Ulrey’s story can be found by going to the United Way of Southwest Michigan website in the Success Stories section. She is one of many in the area that have utilized the help of agencies in Southwest Michigan to improve their lives and the lives of others.
The latest ALICE Update is available online at UnitedForALICE.org/Michigan and includes interactive dashboards that provide data on financial hardship at the state, county and local levels.
To contribute to the work of United Way of Southwest Michigan, which assists impact partners in the Berrien, Cass, and Van Buren county area focused on the ALICE population, visit uwsm.org to find out how you can give, advocate, or volunteer.
About Michigan Association of United Ways
Michigan Association of United Ways (MAUW) is a partner in developing powerful responses to current and emerging issues in local communities. The State Association provides leadership in policy influence and capacity building to affect positive change. MAUW serves approximately 35 local United Ways that represent the largest network of non-governmental service providers and service funders in Michigan, collectively raising and distributing significant resources to support local health and human service organizations.
About United For ALICE
United For ALICE is a U.S. research organization driving innovation, research and action to improve life across the country for ALICE (Asset Limited, Income Constrained, Employed) and for all. Through the development of the ALICE measurements, a comprehensive, unbiased picture of financial hardship has emerged. Harnessing this data and research on the mismatch between low-paying jobs and the cost of survival, ALICE partners convene, advocate and collaborate on solutions that promote financial stability at local, state and national levels. This grassroots ALICE movement, led by United Way of Northern New Jersey, has spread to 31 states and includes United Ways, corporations, nonprofits and foundations in Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawai‘i, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, Washington, D.C., West Virginia and Wisconsin; we are United For ALICE. For more information, visit: UnitedForALICE.org.
About United Way of Southwest Michigan
United Way of Southwest Michigan fights for the Health, Education and Financial Stability of every person in every community. We have the influence and relationships to make sustainable change a reality. By harnessing resources from corporate, nonprofit and public partners, we provide immediate assistance to our most vulnerable populations while addressing the root causes of our community's longstanding challenges and changing lives for the better. To join the fight—through giving, advocacy and volunteering—visit uwsm.org.