It’s those who are the backbone of society who are struggling to make ends meet, and it started before the COVID-19 pandemic, according to a new report from the Michigan Association of United Ways detailing the numbers of households living Asset Limited, Income Constrained, Employed — “ALICE” households who earn more than the Federal Poverty Level, but not enough to afford a bare-bones household budget.
“ALICE keeps the economy running — our nurterers and ‘infrastructers’ are the maintainers of the community,” Ottawa County United Way President Patrick Moran says. “Sometimes (those living below ALICE thresholds) are even teachers; they’re the mechanics, the people serving us our food, the things that we use every day.”
Making ends meet
The majority of infrastructure jobs and nurturer jobs — health care, education, and care giving — paid less than $20 an hour in Michigan. That’s about $41,000 a year before taxes. The report also found households who are Hispanic, Black, and single, female-headed with children are significantly more likely to fall under the ALICE threshold.
“With the ALICE report we realized that so many other people in the community that on the surface look like they’re doing fine are struggling,” Moran says. “ We cannot ignore the needs of people struggling to make ends meet.”
The 2021 ALICE Report
found 38% of households struggled to make ends meet in 2019, prior to the onset of the coronavirus pandemic, essentially unchanged from the 39% of households identified as living below ALICE thresholds in the previous biennial report, but up significantly from pre-recession 2007.
Pushed over the edge
According to a data point new to this year’s report, another 10% of households in Michigan were on the cusp of the ALICE threshold in 2019.
The COVID-19 pandemic almost certainly pushed many over the edge, Moran says.
The average ALICE Household Survival Budget in Michigan was $23,400 for a single adult, $26,244 for a single senior, and $64,116 for a family of four in 2019—significantly more than the Federal Poverty Level of $12,490 for a single adult and $25,750 for a family of four.
“By showing how many Michigan households were struggling in 2019, the 2021 ALICE Report provides the backstory for why the COVID-19 crisis is having such a devastating economic impact,” says Mike Larson, CEO, Michigan Association of United Ways. “This data shows the ALICE population was completely unprepared to weather a storm like the one we have faced the past year, and those we have relied on the most—essential workers—were often receiving the least.”
Of households where they are married with kids and both adults have jobs, about 13% live below the ALICE threshold. For single moms, that’s flipped on its head — 74% of whom live below the ALICE threshold, according to the report.
“Every day and especially in times of crisis, we rely on countless essential workers to keep us going,” Michigan Governor Gretchen Whitmer said in a release. “These frontline heroes show up day after day allowing the rest of us to stay home and stay safe.”
She pointed to the 2021 Michigan ALICE report when calling for initiatives that invest in the health, education, and financial security of essential workers such as Futures for Frontliners, Michigan Reconnect, and expanded access to child care assistance.
The numbers are almost as bad for adults 25 years old or younger without kids; 60% live below the ALICE threshold. And 41 percent of seniors are in the same situation.
Housing, education, food, transportation, health care, and technology are the five ALICE essentials.
The new ALICE Essentials Index measures the costs of essential household goods and services. It is intended to be a companion to the U.S. Bureau of Labor Statistics’ Consumer Price Index, which covers all goods and services that families at all income levels purchase regularly. From 2007 to 2019, the cost of household essentials (housing, child care, food, transportation, health care, and technology) increased faster than the cost of other goods and services. During that same period of time, the cost of living, based on the ALICE Essentials Index, has increased by 3.4% for ALICE households — almost twice as much as the 1.8% increase in the CPI during that time.
Housing and child care
The severe dearth of affordable housing in Ottawa County is well known and it is something the United Way and other nonprofits are working to solve. However, there’s another expense that doesn’t always receive attention.
“The single biggest expense for a household with children under five – including housing – is child care,” Moran says, citing the average cost of child care for a family with two children under 5 years old in Ottawa County is $1,175 a month.
“The purpose of the ALICE data,” he stresses, “is to identify the problems so we can solve them.”
The Ottawa County United Way has been working with other area nonprofits to change the housing environment and create more affordable housing closer to schools and employment.
“We’re trying to maximize different sources of support, so people can just go go work every day, drop their kids at daycare and have dinner when they get home without worrying,” Moran says.
The 2021 report concludes with an analysis of the economic benefits if all households had income above the ALICE threshold—an estimated $98 billion added to the Michigan GDP.