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New ALICE Report Data Reveals Financial Hardships Amid the Pandemic

The Michigan Association of United Ways has released its 2023 ALICE report, providing a first look at the extent of financial hardship in Michigan since the COVID-19 pandemic began.

Family together in the living room, working and playing.

The Michigan Association of United Ways (MAUW) has released its 2023 ALICE report, providing a first look at the extent of financial hardship in Michigan since the COVID-19 pandemic began.

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. 

The new report, ALICE in the Crosscurrents: COVID and Financial Hardship in the United States, funded by CMF member Consumers Energy Foundation, details the impact of competing economic forces and public policy interventions during the pandemic on ALICE households in Michigan in 2021 and the impact of the pandemic on financial security continued beyond 2021.

During CMF’s 50th anniversary regional celebration in Kalamazoo last week, CMF members got a first look at high level data highlights and Hassan Hammoud, president and CEO of MAUW, shared more on the value of the data.

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.

ALICE data in Michigan at a glance:

  • 13% of households in Michigan were in poverty in 2021. Yet United For Alice data shows that another 26% were considered ALICE.
  • In 2021, 39% of households in Michigan had income below the ALICE Threshold of Financial Survival.

The report highlights the impact of the COVID-19 economy on demographics and equity, work and wages, savings and assets and pandemic assistance.

Key findings of the report include:

  • Financial hardship over time: From 2019 to 2021, the total number of ALICE households increased by 2% and the number of households below the ALICE Threshold increased by 4%.
  • Demographics: There are households below the ALICE Threshold across all demographic groups. By race/ethnicity, in 2021, 59% of Black and 44%of Hispanic households were below the ALICE Threshold in Michigan, compared to 36% of White Households. By age of householder, the youngest (under age 25) and oldest (age 65+) households faced the highest rates of hardship.
  • Work and wages: Of the 20 most common occupations in Michigan in 2021, 70% paid less than $20 per hour. According to the report, most of these jobs saw an increase in the median wage; for example, the median wage for cashiers increased by 4% from 2019 to 2021. Given that wages have stagnated for a decade, many top jobs still have a substantial percentage of workers who lived below the ALICE Threshold in 2021.
  • Pandemic assistance: A family of four with two parents working full time in two of the most common occupations was only just able to afford the Household Survival Budget in 2021 through the expanded Child Tax Credit, the Child and Dependent Care Tax Credit and the Economic Impact Payments. However, two parents working part-time were not able to meet the budget, even with additional public assistance.
  • Savings and assets: In late 2019, 35% of households below the ALICE Threshold had emergency savings or rainy day funds compared to 65% of households above the Threshold. By late 2021, the percentage of households with rainy day funds increased for households both below and above the Threshold, but the disparity between the groups widened slightly.

According to the report, as pandemic assistance has waned, there are warning signs that the economic situation for households below the ALICE Threshold has worsened since 2021, including sustained high levels of food insufficiency, feelings of anxiety and depression and continued difficulty paying bills.

The report offers several next steps to support ALICE households, including exploring interactive data by state, county or community, connecting with stakeholders and advocating for better and more equitable data.

Want more?

Read the full report.

Explore the ALICE research center for data by state and county.