Still Struggling: ALICE Report Shows 40% at Risk Financially

Four of every 10 households in the Battle Creek and Kalamazoo region are either in poverty or barely getting by financially, a new report on Michigan’s working families reveals.

The Michigan Association of United Ways (MAUW) has released a study on the condition of Michigan’s working families, which it has dubbed ALICE households—those that are Asset Limited, Income Constrained, Employed. The report found that ALICE households now make up 43 percent of Michigan households, up from 40 percent in 2017. Despite overall improvement in employment and gains in median income, 1.66 million Michigan households could not afford basic needs such as housing, child care, food, transportation, health care and technology. The cost of the average Michigan family budget also increased by 27 percent from 2010 to 2017, despite a low rate of inflation nationwide—12 percent during the same timeframe.

In Calhoun and Kalamazoo counties, 40 percent of the region’s 158,631 households fell below the ALICE threshold, which is the income level where a family can move beyond a survival budget. That’s up from 38 percent in the last report released in 2017.

“ALICE represents some of the hardest-working people in our community, yet they’re still struggling to make ends meet,” said Chris Sargent, President and CEO of United Way of the Battle Creek and Kalamazoo Region (UWBCKR).

Sargent said households with limited income often exist in a state of financial stress, facing tough decisions to use what little money they have to pay rent, keep food on the table, keep the lights on, maintain a car to get to work or buy medicine to stay well. This can cause a spiral that can lead to a family losing a home, a person unable to work, or a child unable to learn in school.

“That struggle isn’t theirs alone. It affects all of us,” he continued. “So when we invest in policies and programs to help ALICE families build financial strength, our entire region benefits. Our economy grows, our social systems aren’t strained, and every person has the opportunity to succeed.”

Low-Wage Jobs Dominate
Although unemployment rates are falling in Michigan, the ALICE Report found that low-wage jobs dominate the employment landscape; 61 percent of all jobs in Michigan paying less than $20 per hour. At the same time, an increase in contract jobs and on-demand jobs is leading to less financial stability. For the many households that earned slightly above the ALICE threshold in the past, increases in the cost of living and flat wages have pushed them below the threshold and into financial hardship.

“Through the release of our third ALICE Report, Michigan’s United Ways are banding together to bring to light the issues hardworking Michigan residents face every day,” said Mike Larson, CEO, Michigan Association of United Ways. “As we continue to uncover the depth and breadth of Michigan’s ALICE population, we hope to encourage legislators and business leaders alike to chart a path forward for our state’s most vulnerable residents.”

“Nobody working more than 40 hours a week should be struggling to take care of themselves and their families,” said Michigan Governor Gretchen Whitmer. “We need to come together and invest in real solutions that will help Michiganders get ahead. The budget I proposed this month will do just that, by doubling the Earned Income Tax Credit and repealing the Retirement Tax, which will save families hundreds of dollars per year, and making the biggest investment in K-12 education in a generation of kids. I’m eager to work with my partners in the legislature to pass a budget that will help lift Michigan families out of poverty and ensure everyone has a path to a good-paying job.”

The Michigan Association of United Ways joins with roughly 450 United Ways from 15 states across the country to better understand the struggles of ALICE. Various organizations across the country are also using this data to better understand the needs of their employees, customers and communities.

In Michigan, Consumers Energy funded the ALICE Report study. “At Consumers Energy, we are committed to helping Michigan succeed. The ALICE Report is important because it provides policymakers, community leaders and businesses with detailed data to shape good decisions that serve the people of our state,” said Brandon Hofmeister, president of the Consumers Energy Foundation.

Why Local ALICE Households Struggle
UWBCKR’s Sargent said local ALICE families have not seen their income keep pace with the cost of housing, child care, food, transportation and health care—what’s known as the Household Survival Budget. A family on a Household Survival Budget can’t build savings or invest for the future. That leaves them at risk from unexpected expenses.

According to the latest ALICE Report, a single adult in Calhoun County earning $20,988, or a family of four earning $61,368, is considered living on a Household Survival Budget. In Kalamazoo County, those figures are $20,976 for a single adult and $66,628 for a family of four. That is the income needed just to make ends meet. About 14 percent of households in the two counties fall below the adjusted Federal Poverty Level.

Sargent said UWBCKR focuses on programs and partnerships that assist vulnerable individuals and families, especially those in or at risk of an economic crisis. Currently, UWBCKR is investing $6,567,096 in 125 programs through 67 partners addressing specific needs in education, financial stability, health, and basic needs. Efforts range from early childhood success, stable housing and income and workforce supports to food, shelter, family and infant health, and much more.

Sargent pointed to the Career Life Expo, a combination job fair and support services event happening on March 26, as the kind of creative approach that can help ALICE households.

“Making sure people have access to good-paying jobs and the supports they need to get beyond barriers to working can make a big difference for ALICE households,” he said.

The Career Life Expo, led by UWBCKR, Michigan Works Southwest and local business sponsors, takes place March 26, noon to 5 p.m., at the Kalamazoo County Expo Center. Details can be found online at tinyurl.com/CLExpo2019.

A list of United Way’s local investments and programs is available at changethestory.org/partners-and-programs. The latest progress on UWBCKR’s long-term strategic goals, including efforts to assist ALICE, can be found at changethestory.org/impact-report.

“The new ALICE Report brings clarity to our impact work,” said Sargent. “This data helps us focus on the most crucial needs afflicting vulnerable households so we can bring every partner together to develop sustainable, measurable solutions that change lives.”

Find out more about ALICE and the latest report here.

Here are links to Calhoun County and Kalamazoo County ALICE data sheets as well as ALICE fast facts for Michigan.