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Report finds almost 40% of MI households struggled to afford the basics in 2021

39% of Michigan households fell below the ALICE cost-of-living threshold in 2021.
39% of Michigan households fell below the ALICE cost-of-living threshold in 2021.

Nearly 40% of Michigan households struggled to afford basic needs in 2021. That’s according to the latest version of a biannual report from the United Way.

The ALICE (an acronym for Asset Limited, Income Constrained, and Employed) report looks at the number of households that fall below a basic cost-of-living standard. In the latest report, that was just under $60,000 a year for a family of four—well above the federal poverty level, which was $26,500 in 2021.

The report found that nearly 1.6 million, or 39%, of Michigan households fell below that ALICE threshold that year. That’s just a slight uptick from 38% in 2019.

Nonetheless, Michigan Association of United Ways CEO Hassan Hammoud said it’s significant. “We’re saying almost 40% of Michigan families don't make enough to be considered having an income that allows them to survive and thrive,” he said.

2021 was a unique year economically, with fallout from the COVID-19 pandemic putting a strain on many household budgets. On the other hand, it was also a time of generous but temporary government benefits meant to cushion the blow.

Hammoud said those benefits undoubtedly did so, helping many ALICE families and helping boost others above the threshold. “That number would likely be very much higher had it not been for that nearly $14,000 in tax credits that families were able to take advantage of,” he said, noting that stimulus payments helped as well.

Hammoud said the child tax credit and the child daycare tax credit especially “were very significant supports that lifted more children out of poverty than we've ever seen in history in Michigan.” But now that these pandemic benefits have either expired or are poised to, Hammoud is worried.

“I'm concerned about what we're going to see in the nonprofit side in terms of our ability to be able to support all of these people that are going to probably be struggling very soon,” he said. He noted that when the SNAP program ended more generous food benefitsrecently, “the information and referral system here in Michigan saw a 30% increase in calls to 211 in that first 30 days related to food. That's monumental.”

The report also highlighted significant and persistent demographic gaps in which households struggle to make ends meet. 59% of Black and 44% of Hispanic households fell below the ALICE threshold in 2021, compared to 36% of white households. 71% of households headed by single women also fell below the threshold.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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