Peter Ruark is a senior policy analyst at the Michigan League for Public Policy
In September, the U.S. Census Bureau released its annual state poverty statistics. We learned that Michigan’s total poverty rate (15 percent) and child poverty rate (20.2 percent) are at their lowest in eight years, and that the poverty rate for African-Americans and Native Americans fell significantly since last year.
A poverty rate that is almost back to where it was just before the Great Recession is something to celebrate. It suggests there are fewer people experiencing serious hardship in our state. But, as so often is the case, there are a few caveats to the good news.
First, the poverty rate simply shows the percentage of the population that is below the federal poverty threshold. This measure was designed in the 1960s based on food costs, and many experts—including the person who created the poverty threshold measure—believe it is outdated as a tool for determining levels of need.
While the poverty threshold for a single parent household with two children is $24,339, for example, the Michigan League for Public Policy in its Making Ends Meet report calculates that after taking expenses such as rent and full-time child care into account, the household would need $47,321 to meet its needs without government or private assistance — nearly twice as much as the federal poverty threshold. We must never assume that just because a family is not officially considered poor, it is not experiencing financial difficulty.
Second, it is possible for a person to work full time and be in poverty. A full-time, year-round minimum wage job will not bring a three-person family above the poverty line. The idea that “the best way to leave poverty is through work” is correct, but only if the job pays an adequate wage.
Third, Michigan does not do a good job at helping its residents leave poverty. Temporary cash assistance (popularly called “welfare”) is only available to households with income below $9,768 per year—approximately half the poverty threshold and considered to be “extreme poverty.” Michigan’s Legislature has not set the minimum wage at a level that will enable workers to leave poverty through work. And, Michigan has cut adult education funding and programs that help low-skilled workers attain the skills and credentials they need to be successful in the job market.
The Census data also show that Flint has the worst poverty rate in the nation for a city its size, and Detroit, while its rate declined, is still ranked high as well. Michigan needs to figure out how to bring jobs back to the state or grow new jobs, but also invest more in adult education and making college tuition cheaper to make sure that the people who are suffering the most are prepared for those new jobs.
Policymakers in Michigan cannot just sit on their laurels because the poverty rate is improving.Rather, they need to prioritize state funding to help make work pay and to help residents get the skills they need to leave poverty permanently and move toward economic security.