Poverty rate jumps 20% since 2007

Sept. 22, 2011
Contact Judy Putnam at (517) 487-5436

One in four kids in poverty in Michigan, census shows
New data points to need for a balanced approach

Nearly 2 million people in Michigan lived in poverty in 2010, with the poverty rate jumping 20 percent since the country slid into the Great Recession, new census data released today shows.

Overall, 16.8 percent in Michigan lived in poverty last year, up from 14 percent in 2007 before the latest recession. African Americans in Michigan experienced double the poverty rate with 33.9 percent living in poverty last year.

Child poverty also grew to 23.5 percent in 2010, up from 22.5 percent the previous year and 19.4 percent in 2007. In Detroit, more than half of the children – 53.6 percent – lived in poverty last year.

“With one of every four kids in our state and half of the kids in our largest city growing up in poverty, we need to redouble our efforts to address revenue shortfalls to protect children and families in Michigan,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Human Services. “We’ve been slashing the very services that keep these children and families from falling through the cracks.’’

Poverty is defined as income of about $17,000 or less for a family of three and $22,000 or less for a family of four.

Unfortunately the state budget that begins on Oct. 1 relies on steep cuts to vital programs that can offset the lifelong consequences for children in impoverished families while offering $1.6 billion in tax cuts for businesses.

Among safety net cuts are the ending of cash assistance on Oct. 1 to 11,000 families, including nearly 30,000 children; reduction of the Earned Income Tax Credit to working poor families; elimination of the back-to-school clothing allowance for most of the state’s poorest children and new limits on food assistance that will harm the newly unemployed. In addition, deep cuts to education are included in the new budget. Only health care was spared.

“We can’t solve our problems in Michigan by continuing to rely on cuts alone and keeping our fingers crossed that businesses will create new jobs in a slow economy,’’ said Karen Holcomb-Merrill, policy director at the League. “We need to take a balanced approach that includes new revenues so we can invest in our future and, more importantly, our children’s future.’’

The number of people living in poverty also underscores the critical role of federal assistance, including unemployment insurance, expanded food stamps, and tax credits for middle- and low-income households.

“As bad as poverty is today, Census figures from last week show that those programs kept many in Michigan and millions more Americans from falling below the poverty line in 2010,’’ Jacobs said.

To avoid worsening poverty and undermining the economy’s future, Congress must also take a balanced approach to deficit reduction that relies on both responsible cuts and ways to increase revenue. Reductions in Medicaid and other critical supports for struggling families would take away help as they continue to weather this difficult economy.

The Michigan League for Human Services is a nonprofit, nonpartisan statewide policy and advocacy organization dedicated to ensuring that Michigan’s low-income residents achieve economic security.