the Alice project
1.6 Million Households - 41% In Michigan - struggle to afford the basics.
1 in 4 Michigan households earn
above the poverty line, but
not enough to cover the basics.
We call these folks ALICE: Asset-Limited, Income-Constrained, and Employed. They are working and earning money, but what they earn still can’t cover the rising costs of the basics. As a result, they can’t save money for emergencies, retirement, or a home, so their assets are limited.
The ALICE Report is the most comprehensive estimate to date of what it costs to live and work in Michigan, and who can afford it.
The good news is that local United Ways, along with champions in the public and private sectors, are working on solutions across Michigan to help ALICE households rise above these challenges so everyone in our community can thrive.
THE UNITED WAY ALICE REPORT REVEALS THE MAGNITUDE OF FINANCIAL HARDSHIP IN MICHIGAN.
ALICE is especially vulnerable to economic disruptions.
From 2019 to 2022, the state’s total households increased by 2%, but the number of households below the ALICE Threshold increased by 13%. 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 widening gap from 2021 (down from 41% & 74% respectively).
Persistent DISPARITIES exist ACROSS race, age, gender, and geography.
63% of Black and 47% of Hispanic households were below the ALICE Threshold in 2022, compared to 38% of White households. By age of householder, the youngest (under the age of 25) and oldest (age 65+) households faced the highest rates of hardship. By household composition, 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, 75% OF the most common JOBS IN MICHIGAN PAid LESS THAN $20 PER HOUR.
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. For example, the median wage for fast food workers increased by 23% from 2019 to $13.00 per hour in 2022, but 49% of these workers still lived below the ALICE threshold.
With Temporary pandemic assistance Expiring, households below the alice threshold Have Fewer Options for Help.
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.
As We Enter A New Economic Reality, there are warning signs for ALICE Households.
With pandemic assistance waning while significant challenges remain, 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 Bottom Line
as Michigan Charts the future of its economy, leaving alice behind will set households and the larger economy up for greater vulnerability during the next economic disruption.
The health of Michigan’s economy and communities is inextricably tied to the financial stability of all residents. ALICE workers are critical to the smooth running of the economy, and ALICE households make up a growing segment of our shrinking population. The stability of any household depends on their being able to fully participate in the economy, yet the warning signs show that as of 2022, ALICE’s financial situation has gotten worse.
We have seen government policymakers, community leaders, and business managers respond to changing conditions quickly. Our latest estimates from 2022 - the entry of 100,000 additional households below the ALICE threshold while our state’s population has declined - must be received as both a call to action and a challenge to complacency. ALICE deserves action to lower their essential costs, to raise their incomes, and to open pathways to new jobs that earn above the ALICE threshold. We ignore ALICE at the peril of the health of our economy and of our communities.
