The 2021 ALICE Report for Michigan released by the Michigan Association of United Ways (MAUW) and funded by Consumers Energy Foundation, is providing new insights into economic challenges for Michigan residents, pre-pandemic.

Asset Limited, Income Constrained, Employed, known as ALICE, comprises households that earn wages above the Federal Poverty Level (FPL) and therefore are not eligible for benefits but earn less than the basic cost of living in the state. 

According to the report, in 2019 13% of Michigan households earned below the FPL and 25% were considered to fall within the range of ALICE, meaning that a total of 38% of Michiganders are living below the ALICE threshold and struggling to afford basic necessities. 

Understanding the economic conditions throughout Michigan in 2019 provides critical insights into why COVID-19 has been economically devastating to so many Michigan residents:

•    The cost of living has been increased for ALICE households; the cost of household essentials increased at an average rate of 3.4% annually nationwide over the past decade.

•    The economy is dominated by low-wage jobs and more fluctuations in job hours, schedules and benefits. In 2019, 58% of Michigan workers were paid by the hour and 58% of the state’s jobs paid less than $20 per hour. 

•    The number of ALICE households in Michigan increased during the Great Recession and have never recovered. ALICE households rose from 19% in 2007 to 25% in 2019, never returning to pre-Recession levels. 

Data at a glance:

•    The cost of basic necessities for ALICE households was significantly more than the FPL. The Average Household Survival Budget in Michigan was $23,400 for a single adult and $64,116 for a family of four compared to the FPL of $12,490 for a single adult and $25,750 for a family of four.  

•    31% of households below the ALICE threshold did not have an internet subscription in 2019.  

•    58% of college students were experiencing basic needs insecurity.

•    People of color were disproportionately affected with 60% of Black households and 48% of Hispanic households below the ALICE threshold.  

•    The number of households below the ALICE threshold increased by 4% for Black households, 25% for Hispanic households, and 41% for Asian households in 2019.                              

 •   Seniors accounted for 35% of all households below the ALICE threshold.

•    Married-parent families accounted for 30% of families with children living below the ALICE threshold. 

The report builds on the data to highlight the economic benefit of bringing all households to the ALICE threshold, growing Michigan’s GDP by 18%. 

According to the report, a $1 increase in compensation for workers receiving lower wages leads to increased economic activity that would be valued at $43.9 billion in Michigan. 

The report shares other economic benefits of additional earnings including an added $1.7 billion in tax revenue. 

In 2019, Michigan’s GDP showed community spending of $57.9 billion to assist households below the ALICE threshold. The report highlights that if these households can meet their basic needs, this spending can be relocated to other projects and programs to help communities thrive. 

A few positive impacts of sufficient income for basic needs identified in the report:

•    Safe and affordable housing: Improved health through safer environments, less traffic, lower crime rates and less community spending on homelessness and social services.

•    Food: Decreased likelihood of developmental delays for children, lower health care costs and less spending on emergency food services. 

•    Child care and education: Higher lifetime earnings, improved job stability and a decrease in income disparities. 

As the report shares, “This data can help policymakers and community organizations identify gaps in community resources and it can guide businesses in finding additional ways to assist their workforce and increase productivity.”

CMF members and staff shared the ALICE data with our policymakers during Foundations on the Hill last week and we will continue to use the data to inform conversations with policymakers and partners.

Want more?

Read the full report.

Join the CMF community on April 9 for Michigan Responds: The Now, The Near and The Far Through COVID-19 and Beyond where Michigan's charitable sector leaders will discuss current needs and challenges our communities and nonprofits are experiencing, one year after their first pandemic-era conversation event together.