The Michigan Association of United Ways (MAUW) has released the 2024 update to the ALICE Report, detailing the impact of competing economic forces and the expiration of pandemic-era public policy interventions on ALICE households in Michigan in 2022 and the impact of the pandemic on financial security beyond 2022. 

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.

This ALICE Report, supported by CMF member the Consumers Energy Foundation, provides the first look at the extent of financial hardship in Michigan using ALICE metrics as prices rose following the economic shocks of the pandemic.

The report uses ALICE metrics to measure household costs and income.

The Household Survival Budget calculates the cost of household essentials for each county in Michigan and relies on a wide range of sources for the budget items of housing, child care, food, transportation, health care and a smartphone plan, plus taxes. For household income, ALICE measures rely on the U.S. Census Bureau’s American Community Survey.

Household costs are compared to household income to determine if households are below the ALICE Threshold.

Key findings of the report include:

• ALICE households have fewer options to find help with temporary pandemic assistance expiring. In Michigan, a family of four with two parents working full time in two of the most common occupations were only just able to afford the Household Survival Budget in 2021 when including the expanded Child Tax Credit, the Child and Dependent Care Tax Credits and the Economic Impact Payments. However, the expiration of these pandemic-era expansions means that the same family in 2022 was eligible for $15,000 less in federal tax credits and payments than they were in 2021.
• The number of ALICE households in Michigan has continued to grow. Since the end of the Great Recession (2010-2022), the total number of households in the state increased by 6%. At the same time, households in poverty decreased by 6%, while the number of ALICE households increased by 20%.
• During the COVID-19 pandemic, the rate of financial hardship in Michigan increased from 38% of households below the ALICE threshold in 2019 to 41% in 2022, and the number of households below the Threshold increased from 1.5 to nearly 1.7 million.
• ALICE households are especially vulnerable to national economic disruptions. From 2019 to 2022, the total number of ALICE households increased by 2%, but the number of households below the ALICE Threshold increased by 13%.
• There are significant disparities across demographic groups. In 2022, 63% of Black and 47% of Hispanic households were below the ALICE threshold, compared to 38% of White households and 27% of Asian households. 73% of single-female-headed households with children are below the ALICE Threshold, while only 16% of households married with children are below the ALICE threshold.
• In 2022, 51% of Michigan’s households headed by individuals aged 65 and over were below the ALICE threshold. According to the report, while Social Security helps reduce the poverty rate for households headed by older adults (11% in Michigan in 2022), benefits have not been enough to help bring older adults to financial stability.
• Of the 20 most common occupations in Michigan in 2022, 75% paid less than $20 per hour. Most of these jobs saw an increase in the median wage, but the increases could not keep up with inflation, so a substantial percentage of these workers still lived below the ALICE threshold.
• Fewer ALICE households have rainy day funds. In 2022, only 37% of households below the ALICE threshold had emergency savings or rainy day funds, compared to 67% of households above the threshold. This represents a decline from 2021, down from 41% of households below the ALICE threshold and from 74% of households above the ALICE threshold.

According to the report, there are warning signs that the economic situation for households below the ALICE threshold has worsened since 2022. Including sustained high levels of food insufficiency, feelings of anxiety and depression, and continued difficulty paying bills.

The report offers several tools to explore interactive data and resources, including exploring data by state, county or community, legislative district, demographic and more. 

Want more?

Read the full report.