Evidence is clear
New Census data just out shows one in every seven people in Michigan live in poverty, a startling 50 percent jump over the decade.
Poverty rose from 9.8 percent in 1999-2000 to 14.8 percent in 2009-2010, reflecting the pain of Michigan families struggling with unemployment and underemployment, according to the Current Population Survey. A family of four lives in poverty with an income of about $22,000 or less.
In Michigan, 1.3 million people, including 121,000 children, went without health insurance. The big driver on this was the loss of employer-sponsored insurance, dropping from more than 76 percent covered a decade ago to 64 percent last year.
One of the more troubling findings for Michigan is that the median household income dropped by more than $12,000 per family over the decade – the biggest drop in the country. Average median income in 2010 was $46,600, below the national average of $50,000.
These findings speak to the need to not only invest in our workers, but make sure the safety net for children and families is in place as families struggle with unemployment and underemployment.
“Deep cuts alone will threaten the recovery and make it harder for Michigan to advance,’’ said Gilda Z. Jacobs, president and CEO of the Michigan League for Human Services in a statement. “We know that rising poverty threatens our economic future.”
In Michigan, lawmakers and the administration should rethink deep cuts to business taxes combined with deep cuts to programs and services that help Michigan children and families.
Unfortunately, Michigan is moving in the wrong direction. The state budget that starts Oct. 1:
• Eliminates cash assistance to 11,000 families with nearly 30,000 children
• Reduces back-to-school clothing allowance (cutting help for up to 12,4000 children to purchase a new set of clothes for school)
• Slashes the Earned Income Tax Credit for 800,000 working families from 20 percent to 6 percent of the federal credit
• Cuts mental health services (cutting funds that would pay for mental health services for 1,000 childless adults with serious mental illness who don’t qualify for Medicaid)
In addition, Michigan lawmakers reduced unemployment benefits from 26 to 20 weeks at a time when half of the jobless spend 26 weeks or longer searching for work.
Research shows that most people favor a mix of cuts and revenue increases. That balance is sorely missing in our state. The Census numbers point out that we need to try harder.
– Judy Putnam
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Categories: Blog: Factually Speaking, Census, Human Services, State Budget, Tax Policy, Workforce Development | Tags: budget, cash assistance, Census, children and families, data, Department of Human Services, earned income tax credit, eitc, food assistance, Health Care, medicaid
Busting the Myths on Welfare Recipients
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myth: Welfare recipients are lazy and have a poor work ethic.
According to the Michigan Department of Human Services (2003), a parent who is receiving welfare benefits most likely works a part-time job and earns minimum wage. The family may earn an average of $700 to $800 per month, which places them at 50 percent of the federal poverty income guideline for a family of three.
Poor people do not have a decreased amount of motivation, nor do they have poor work ethics as compared to their wealthier counterparts (ASCD 2008). According to the National Center for Children in Poverty (2004), “…83 percent of children from low-income families have at least one employed parent; close to 60 percent have at least one parent who works at least full-time and year round.” Many poor adults are forced to work two, three, or four jobs due to the decrease of living wage jobs. The Economic Policy Institute (2002) states that, “poor working adults spend more hours working each week than their wealthier counterparts.”
myth: Welfare recipients receive benefits for a long period of time.
Families headed by able-bodied adults can collect TANF benefits for only 60 months –a total of five years – in their lifetimes. Nationwide, only about two percent of TANF families reach that limit and lose their benefits each year. More than 70% of women on welfare stay on the rolls for less than two years. 50% of recipients exit TANF in the first year of welfare, and 75% of recipients exit TANF in the first two years of welfare.
myth: Welfare is full of fraud and no one is doing anything about it.
Welfare is not full of fraud. A large number of welfare recipients are innocent women and children who have fled from abusive living situations. In these particular situations the women and children may be left with little to nothing. Therefore, they would qualify for section 8 housing, food stamps, and welfare money in an attempt to begin a new life. Welfare attempts to present its recipients with new opportunities. Some individuals get “lucky” and do not need the benefits long, while others struggle to get on their feet due to the lack of resources available to them (U.S. Census Bureau, 2003).
myth: Most of the people on welfare are unmarried mothers who have extra children so that they can get more money.
Although one in four children under 18 receives welfare benefits, that does not mean that a few women on welfare have lots of children. “The average monthly number of TANF families was 3,176,000 in fiscal year (FY) 1998. The estimated total number of TANF recipients was 2,631,000 adults and 6,273,000 children. The average number of persons in TANF families was 2.8 persons. The TANF families averaged 2 recipient children, which remained unchanged. Two in five families had only one child. One in 10 families had more than three children.”
myth: People on welfare are there because they are addicted to drugs.
Welfare recipients are no more likely to use drugs than the rest of the population. In 1999, Michigan created a law that required all welfare recipients to undergo mandatory drug testing. Only 10% of recipients tested positive for illicit drugs and only 3% tested positive for hard drugs such as cocaine and amphetamines. These rates are in line with the drug use rates of the general population. The Michigan policy was struck down as unconstitutional in 2003 (ACLU, 2008).