State struggles to boost lives of the working poor

Today’s Michigan is home to a vast population of people who have a job, yet are still struggling to survive.

A report by the United Ways of Michigan concludes that 40 percent of Michigan households are either in poverty or holding down jobs yet are barely able to cover the basic costs of housing, food, childcare and transportation.

Employed people who can’t afford necessities have been called the “working poor,” but the report uses the acronym ALICE – “Asset Limited, Income Constrained, Employed.” ALICE refers to the 24 percent of Michigan workers who earn more than the federal definition of of poverty, and so don’t quality for many forms of public assistance. And yet these ALICE families are often living paycheck to paycheck, one unexpected expense away from the welfare line.

Since last fall, Scott Dzurka, president and CEO of the Michigan United Ways, has been pressing the 242-page ALICE report into the hands of legislators, the media and community groups to help counter the narrative that Michigan’s declining unemployment rate means that the hardships facing working families are over.

There are 930,503 households that fall into the ALICE classification in Michigan, according to the report, which suggests a softer economic recovery than job numbers alone would indicate, with many workers seeing little or no wage growth.

Dzurka argues that when ALICE households can’t afford preventative health care, transportation or other modern necessities, everyone in Michigan is impacted, with higher insurance costs, higher taxes and a decline in economic growth as a result.

“We talk about working poor, but we’ve never really had a concrete measure,” Dzurka said. “ALICE works, ALICE pays taxes … but (these workers are) running into barriers. We want to understand those barriers.”

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The face of ALICE

Amanda Suttle, 30, is one of 3,800 people living in the small city of Plainwell, about 15 miles north of Kalamazoo. In Plainwell, 38 percent of residents are ALICE, while another 11 percent live in poverty, United Way research shows. Until recently, Suttle was a cake decorator at a Walmart. Then she had to take off work, eventually quitting, from carpal tunnel and ligament pain in her wrist.

“It was getting to the point where I was completely suffering,” she said. “I would get home from work and my kids would hug me and I’d cry. The doctors told me if I kept doing cakes, I’d need surgery.”

Suttle has three daughters, one with special needs. While her live-in boyfriend has a job and is paying the bills, Suttle, a high school graduate with a cosmetology license, had to seek public assistance after her injury.

About a year and a half ago she got a life coach through Goodwill Industries, a nonprofit that provides job training. The coach helped her set goals, get books for her kids, as well as offer information on fitness and healthy foods.

More needs to be done to help ALICE households help themselves, Suttle said.

“It seems like there’s not a middle (class) anymore. Either you’re at the top or you’re at the bottom,” she said.

Losing ground

Average wages in Michigan are, in fact, nowhere near the top.

Michigan wages are below the national average with Michigan workers adding only 3 percent to their wages since 1990, when adjusted for inflation, while workers across the nation added 18 percent. More than 60 percent of all jobs in Michigan pay less than $40,000 a year, the ALICE report states.

The United Way ALICE study was first performed in New Jersey in 2007. Last year, Michigan, California, Connecticut, Florida and Indiana were added to the research, which is conducted in conjunction with Rutgers University.

The report first identifies what size household budget is needed to survive in Michigan, and the specific gaps that may exist in various communities in affordable housing, child care, education, food, transportation, health care and income. The report found, for example, that there are over 700,000 renters in Michigan with incomes below the ALICE threshold, yet only about 400,000 rental units these households can afford.

Chances are, everyone knows or is related to a person or family that falls into this category, said Rep. Kathy Crawford, R-Novi.

Crawford said she has given financial help to her daughter, a single mother with a son with a chronic asthma condition requiring expensive medical equipment, resulting in some unexpected bills.

That’s an ALICE situation.

Crawford, who sits on three legislative committees that help shape policy for struggling residents, said it’s too late for the ALICE report to influence this year’s state budget talks. But as the ALICE data gets around the state, it could influence future policy discussions on issues such as job training.

ALICE “is huge,” Crawford said. “Either we’re not doing something or not doing enough. Is it jobs? Is it realignment of resources? Something needs to be done.”

Struggles across regions

In Muskegon Heights, only 28 percent of the population lives above the ALICE threshold. In Muskegon City, it’s 37 percent.

Rep. Marcia Hovey-Wright, D-Muskegon, says those numbers show the state needs to continue to increase the minimum wage.

Child care credits, earned income tax credits, affordable college tuition and affordable healthcare are also policy issues that must be addressed to ease the burden for workers scraping to survive, she said.

“When ALICE is 75 percent of the population like in the case of Muskegon Heights, you can’t just blame the person for being poor. It’s a systemic problem,” Hovey-Wright said.

Government and nonprofits already offer some help to ALICE families – through food banks and publicly-subsidized preschool , for example – but there is still a gap of $8.5 billion to help ALICE households afford the basics, the United Way report states.

That’s a lot of money considering the state’s entire budget is about $52 billion, said Rep. Crawford.

“We need more money for (ALICE). Well, for what? There’s a lot of different layers to this problem,” Crawford said. “It’s a little early to go talk about the budget because there’s no plan for how to use this information.”

That’s what Dzurka is hoping the ALICE report will lead to: plans and solutions.

“We hope to generate conversation about all our resources,” he said.

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Comments

Jeff
Tue, 05/12/2015 - 9:51am
The "right to work," ... for less!
Tracy
Tue, 05/12/2015 - 8:13pm
Exactly. Our youth are feeling the impact of this RIGHT TO WORK! It is not good for any state. This is why Michiganders voted down proposal 1! We cannot sustain anymore tax increases!
Jackie
Wed, 05/13/2015 - 9:50pm
I voted down proposal 1 because the legislature needs to do their job and not slack off and give their work to the voters. Since we pay the least per driver for trans costs I think we can pay more. But end the silly policy of the heaviest trucks in the nation. And do not add yumpteen riders to the bill!
Tue, 05/12/2015 - 9:55am
Don't the people in Michigan have the God given right (Genesis 1:29, Gen 3:18, Gen 9:3.) to grow hemp for food, fuel & fiber? Especially those living in poverty? Hemp seeds are a THC free Super food. Let's restore the "Hemp For Victory!" campaign.
Robert Kleine
Tue, 05/12/2015 - 10:09am
So the governor and the legislatures response is to cut the Earned Income Tax Credit from 20% to 6% so business taxes can be cut to the lowest level as far back as we have records. Direct state business taxes as a share of total state taxes have declined from 13.6% in 1995 to 11.5% in 2000 to 10.3% in 2011 to 4.8% in 2013, and because of large business tax credits will drop even further in 2015 and 2016. It is unlikely that any state has lower state business taxes.
Jackie
Wed, 05/13/2015 - 9:54pm
The welfare state now exists for corporations. And it is not a democracy with the money interests in charge.
camille lievense
Tue, 05/12/2015 - 12:11pm
Hence, the young are leaving and we are going to be a state of retirees, like myself. No population growth.
sam melvin
Tue, 05/12/2015 - 8:54pm
Yes and the Senior are being cut : the etc credit is gone.... The home heating credit down to $ 5.00... The rentrefund cut by 50%....... And the rent increased.. the phone company...cannot STOP their "creates"accouting (every month their are charges ....added.. The cable company cannot keep a bill the same every months.......(so more calls.... and sso on .....
Rich
Tue, 05/12/2015 - 12:37pm
One should realize that with today's communication and transportation technology, it is very easy for most businesses to relocate anywhere to improve their bottom line. Increasing the minimum wage, as Rep Hovey-Wright suggests would only lead to less employment. Higher wages could be gained by different education. The construction trades in Florida, as one example, have more jobs available than people to fill them. Recent reports have shown that the U.S. Understanding of math is well below other nations. Math is required in some form in all jobs, from retail sales to professional engineer. Without the understanding of math appropriate to the level required, employers will be reluctant to hire people. Or to put it another way, if you don't have the skills, you can not expect the pay.
***
Tue, 05/12/2015 - 3:00pm
If the schools aren't getting the job done then employers need to take the bull by the horn, if people lack math skills they need to teach them on their own. Complaining about it like they do is getting them nowhere.
sam melvin
Tue, 05/12/2015 - 8:57pm
The Federeal Goverment gave EMU $ 1,5 million for job traing and so on . we need a report on who got a "JOB" how may and what is their pay .!
madmatthew56
Thu, 05/28/2015 - 4:19pm
Horse hockey. If what you say is true, Mississippi would be the healthiest, fastest growing state in the nation. The vast majority of studies show that raising minimum wages in a planned, reasonable manner doesn't hurt employment -- instead, it gooses the economy, because the working poor spend every penny they make -- they have to, to survive. Put another way, raising the pay of people who work in restaurants to a level where they can actually afford to eat in restaurants is not bad for the restaurant industry (because labor is only one of many costs of operating a restaurant) -- instead, it is GOOD for the restaurant industry, because now many more people can afford to eat in restaurants.
Richard
Tue, 05/12/2015 - 1:40pm
Michigan helped build the middle class because of the high number of union employees. Right To Work For Less is showing it's success. What is also sad is that, as the state tries to build a safety net for the poor, the tax payers are subsidizing the employers who won't pay a living wage.
Rich
Tue, 05/12/2015 - 2:09pm
That worked until we started getting global economies after WW II. Then people started buying imported goods at a much cheaper price. Pretty hard to sell your product when it is more expensive than one available next door that was made in Japan or China. GM used to have 50% of the U.S. Market until all the foreign manufacturers came ashore. Today they have less than 20%.
sammelvin
Tue, 05/12/2015 - 9:03pm
REP.Crawford I would like you to come to our house and we will give you the run down on Foodbanks. etcetc One foodbank just publish there report for our house ...but in no way have we recived that amount of food here. tiered of canned beans..
Mark
Wed, 05/13/2015 - 8:01am
This is where Charity and family come together to support the poor people, not expanded government. Turning to government is easy. I truly support helping the working poor on a limited basis, but all too often, expanded government programs leads to dependency and poverty feeds poverty. Just look at our minority communities.
Jackie
Wed, 05/13/2015 - 9:44pm
Meanwhile the state gives out bribes/otherwise called grants competing against other states for businesses. The country as a whole needs a living wage and we need to end welfare for corporations.
Fred
Tue, 12/22/2015 - 7:08pm
Every single proposed "solution" to the ALICE problem involved taking money from other people and giving it to Alice. Is not one person ready with an idea that would lead to Alice actually EARNING the money?