New data from the United Way of Michigan shows that a staggering 40% of families here experienced poverty before the pandemic struck. The agency says that explains why COVID-19 has taken such a toll on the Great Lakes State. The report examines 2019 poverty data for “asset limited, income constrained, employed” (ALICE) households. The acronym describes families whose household income exceeds federal poverty guidelines but cannot enable upward mobility.
The report examines the impact of the “Great Recession” which ended a decade ago. According to the agency, 4 in 10 Michigan families had difficulty simply making ends meet. Data pointed to a number of factors including chronically low wages, limited savings and inflation-driven cost increases on basic needs. These factors significantly impacted households headed by minorities and single women.
One culprit: nearly 60% of all jobs in Michigan paid workers less than $20 per hour. That’s less than two-thirds of the income needed to support a family of four in Michigan during the study period. When the family-of-four includes children in day care, the minimum household income jumps to nearly $43 per hour. Michigan’s housing costs increased at nearly twice the rate of inflation during that time. In addition to housing costs, the study also examined the cost of other necessities, like food, transportation, insurance, health insurance and taxes.
ALICE: the new faces on the edge of poverty
Nearly one-third of Washtenaw County households (31%) fall below ALICE income thresholds. That includes 12% of households below the federal poverty line, and 19% of households hovering slightly above it. These severely income-limited Washtenaw County households cannot reliably meet all of their basic needs every month.
When you look only at Washtenaw County households that single women lead, 60% fall below the ALICE guidelines. (And Washtenaw County is better positioned than all but three counties in the state for female heads-of-household.)
As I wrote yesterday, the national average hourly wage for associate degree holders is $22, but in Ann Arbor, that figure falls to $18. When you consider that a family of four (with two children in day care) needs an hourly income of $43 per hour, the income opportunity that an Associate degree offers is woefully inadequate. It is not a path out of poverty. Instead, it consigns people to low-wage occupations indefinitely.
That’s almost assuredly not the outcome Washtenaw County taxpayers had in mind when they generously funded WCC. And these conditions certainly do not justify the misdirection of the College’s operational funds to an executive health club or a hotel and conference center. The Board needs to refocus the WCC administration on creating new academic programs and strengthening existing ones. These new programs should focus on putting people in high-demand, high-salary occupations to reduce Washtenaw County’s ALICE households.
Photo Credit: teo_ladodicivideo, via Flickr
