The cost of six household essentials in Michigan has risen at a faster clip than inflation, leaving low-wage workers priced out of affording the basics. That’s the latest analysis from United Way and its research partner, United For ALICE.
Over the course of 15 years, low-wage jobs didn’t keep up with the increased cost of essentials. Workers in retail sales, for example, saw an average $18,700 loss of buying power — nearly a year’s worth of earnings, according to findings within the ALICE Essentials Index.
The gulf that grew between wages and the cost of basics affects the nearly 1.6 million households in Michigan – and nearly 163,000 households in UWSCMI’s six-county region – that fall below the ALICE Threshold, struggling to make ends meet. This includes households in poverty and those that are ALICE (Asset Limited, Income Constrained, Employed), earning above the Federal Poverty Level but less than the cost of basics.
The ALICE Essentials Index tracks the rising cost of essentials, including housing, child care, food, health care, transportation and a smartphone plan. In contrast, CPI tracks inflation across more than 200 categories of goods and services, including luxury items, such as power boats and landscaping services. Yet, CPI is used to calculate increases in critical supports for low-income families, including Social Security and Medicaid.
“ALICE doesn’t buy power boats or hire landscapers — ALICE is doing the landscaping,” said Stephanie Hoopes, Ph.D., national director for United For ALICE, a U.S. research organization driving solutions to financial hardship. “ALICE is simply trying to afford safe housing and dinner on the table. The ALICE Essentials Index recognizes this disconnect and provides a new, targeted inflation measure that could help guide eligibility and increases in assistance programs.”
To learn more about the ALICE Essentials Index, and to explore the online dashboards, visit UnitedForALICE.org/Essentials-Index. You can download a copy of the Michigan fact sheet here.