New League report and online tool calculate how much it really costs to make ends meet in each county

For Immediate Release
May 3, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517-487-5436

For 20 years, League has been publishing report to help policymakers understand true economic struggles of Michigan families

LANSING—It costs a Michigan family between $2,580 and $4,722 a month to pay for necessities and provide for themselves and their family according to Making Ends Meet in Michigan, a new report released by the Michigan League for Public Policy today. The monthly income necessary to make ends meet for a single parent with two kids is $3,943, and it costs a single worker $1,923 a month to get by.

The report analyzes and compiles state and county data on the costs of housing, food, child care, healthcare, transportation, and clothing and other household necessities along with likely taxes owed, to identify the Basic Needs Income Level. The Basic Needs Income Level is the amount of household income a family or individual must have to have in order to meet basic needs without public or private assistance. It’s what it really costs to live in a county.

An online calculator available at www.mlpp.org/calculator can be used to calculate the cost of living by county and family size. This report uniquely analyzes four different household sizes in each county—single, single parent, two parents/both working and two parents/one working. All families assume two children under age 5.

“For too long, policymakers have only used the poverty level and unemployment to assess how people in Michigan are doing, but there’s so much more to every Michigan family’s story and struggles than that,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “This report seeks to draw attention to how much it really costs for families to make ends meet both statewide and in each county, and how our state’s current wages and services are not cutting it.”

The federal poverty threshold determines who is counted as officially poor but tells us little about whether a person or family is living in economic security. It does not reflect regional and local differences in the cost of living and is based on a model that, while adequate when first devised in 1965, is less reflective of today’s economic realities.

The Basic Needs Income Level calculated in this report is intended to help lawmakers and residents easily understand how much income a family needs in order to pay for all of its basic expenses. The Basic Needs Income Level can be used to measure the economic security of Michigan’s working families, assess the adequacy of worker wages and benefits, promote programs and policies that assist families in need, and as a benchmark by which to assess the quality of jobs being created in the state.

With this localized data on how much it really costs for families to make ends meet, the Michigan League for Public Policy’s report reframes the discussions around need, wage standards, public assistance and what it means to live in economic security. The League is focused on ensuring all Michigan residents have economic security because simply lifting people out of poverty is not enough. In addition to showing that the poverty level alone is not an adequate measure of stability, this data also shows that the state’s unemployment rate is not the only—or an adequate—benchmark for economic recovery.

“This data backs up what we’ve been saying the last few years as Michigan has ‘recovered’: the recovery is still not reaching everyone, many people are working in low-wage jobs and barely getting by, and the high costs of child care and healthcare are breaking people at all income levels,” Jacobs said. “There are a variety of policy changes lawmakers can make to help address this, including increasing the minimum wage, upholding healthcare and strengthening child care supports, passing a statewide earned sick leave law, and creating a fairer tax system that helps struggling workers as much as it does the wealthy.”

The League continues to connect the challenges facing Michigan kids and residents with the policy solutions to help them. To that end, Making Ends Meet outlines the following policy recommendations for lawmakers to better support their constituents:

  • Protect Michigan’s expansion of Medicaid and the federal Affordable Care Act as a whole;
  • Restore and strengthen the Michigan Earned Income Tax Credit;
  • Update Michigan’s child care subsidy;
  • Raise the minimum wage;
  • Invest in skills training and adult education.
  • Enact workplace protections such as earned sick leave and predictable scheduling; and
  • Create a more adequate tax system, including a graduated income tax.

In this report, housing costs are based on the Fair Market Rent (the 40th percentile of rents in each county) provided by the United States Department of Housing and Urban Development (HUD). Food expenses are from the United States Department of Agriculture’s Low-Cost Food Plan. Child care costs are based on the 2015 Cost of Care Report from the Early Childhood Investment Corporation and healthcare expenses are calculated using the federal healthcare marketplace exchange. Finally, costs for clothing, household necessities, personal care and telephone come from the Bureau of Labor Statistics Consumer Expenditure Survey and may vary depending on the family’s circumstances. Taxes are based on income and family size. For additional information, including data appendices and more details on how each of these expenses was calculated, go to www.mlpp.org/resources/making-ends-meet-in-michigan.

###

The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

Top ten ways the Earned Income Tax Credit keeps more money in Michiganians’ pockets

Today is Earned Income Tax Credit (EITC) Awareness Day, which helps ensure that low- and moderate-income people who are eligible for the EITC actually receive it. As we work to expand our outreach on this important credit, we also need to celebrate all that this credit does for residents, businesses and communities in Michigan and nationwide. (more…)

Two generation policies offer support for parents and kids

On Monday, October 26th, the Michigan League for Public Policy held our annual meeting and public policy forum, “Secure Parents and Successful Kids.” We were joined by more than 250 people from around the state and a host of national and state experts and innovators in the fields of education, economic security and child well-being to discuss a two-generation approach to tackling poverty. (more…)

New plan paves roads on the backs of working families

From the First Tuesday newsletter
Sign up for the newsletter and e-news

The Michigan Earned Income Tax Credit lets working families who earn low wages or who have fallen on hard times keep more of what they earn to afford the basics. But House Republicans are proposing to help fix Michigan’s roads by eliminating the state EITC– hiking taxes on 820,000 working families raising 1 million kids.

Eliminating the EITC to pay for roads amounts to robbing poor Peter to pay Paul. The $117 million saved by eliminating the credit is a drop in the bucket of a $1.2 billion transportation plan, but a huge amount to families, including military families, who need the credit to make ends meet. (more…)

Road funding ballot proposal: a win-win for everyone

Supporting the passage of the May ballot proposal to increase the sales tax by a penny to fund roads is a win-win. It would benefit working families struggling to make ends meet, schools, local communities, and public transit all while fixing Michigan’s crumbling roads and bridges.

When the Legislature voted to put the sales tax increase before the voters, it tied the passage of the ballot proposal with measures to protect low-income workers and increase funding for schools, local communities, and public transportation.

(more…)

Child poverty in the 21st century

The number of Michigan children living in families with income below the poverty level drops by half when tax and non-cash benefits are included as income, according to the latest analysis from the national KIDS COUNT project at the Annie E. Casey Foundation.

The percentage of the state’s children who would be living in poverty if no government program benefits and tax credits were available, however, stood at 30 percent, as calculated by the Supplemental Poverty Measure. (more…)

Why kids count

Recent news reports celebrate the decline in the unemployment rate and the quickened tempo of the recovery. But four years into the recovery, Michigan’s child poverty rates remain consistently high.

In 2013, one of every four children in Michigan lived in a family with income below the federal poverty level (roughly $18,800 for a single-parent family of three and $23,600 for a two-parent family of four), according to the latest Kids Count in Michigan Data Book, released today. (more…)

‘Yes’ on road funding is right direction

From the League’s First Tuesday newsletter
Sign up for the newsletter, enews and alerts 

It’s a pivotal time for Michigan public policy. Decisions made in the next few months will determine the path Michigan takes into the future.

In three short months, voters on May 5 will decide Proposal 1, the road funding package. There’s no doubt that this is Michigan’s single best chance to raise sorely needed money to pay for road repairs and put new dollars into school classrooms all while protecting families earning the least. (more…)

Happy 40th Birthday, EITC!

Today is EITC Awareness Day, and this year marks the 40th anniversary of the widely recognized tool that lifts millions of working families and children out of poverty each year. States have the opportunity to build on the federal credit, which Michigan does. However, in 2011 the state’s Earned Income Tax Credit was cut leaving behind over 15,000 families in poverty in 2012. On May 5, the voters will have the opportunity to restore the credit by supporting an increase in the sales tax by one penny.

The Michigan EITC is only available to families who have earned income from working. The credit ensures that working families are better able to make ends meet. When combined with the federal EITC, working families are lifted out of poverty and children experience better outcomes, such as improved infant and maternal health; better school performance; greater college enrollment; increased work and earnings in the next generation; and Social Security retirement benefits. All of which also benefit Michigan’s economy. (more…)

Restoring the Michigan EITC Will Help Working Families

 

The Michigan Earned Income Tax Credit is one of the most effective tools for supporting working families and reducing poverty. Michigan lawmakers approved restoration of the state EITC to 20%, if voters had approved the penny sales tax increase on May 5 to pay for needed road repairs and to support schools. However, the proposal was defeated, and the state EITC is now targeted for elimination to help pay for road improvements.

The Michigan EITC was cut by 70% as a result of major tax changes that took place in 2011. The Michigan Legislature and Gov. Snyder reduced Michigan’s EITC from 20% of the federal EITC to 6%. Most EITC recipients claim the credit only temporarily when a job disruption or other significant event reduces their income. A recent study found that, of people who received the EITC over an 18-year period, 61% received the credit for only one or two years at a time. The EITC has also been shown to have a long-lasting, positive effect on children, helping them do better and go farther in school. The EITC also increases work effort and expands Michigan’s economy.

The EITC provides working families with additional options for housing, child care, and transportation so that the family can remain in the labor force and take steps toward self-sufficiency. Restoring the EITC to 20% will lift an estimated 15,000 families above poverty and lessen the impact of poverty on 800,000 families, including more than 1 million children.

 

 

Next Page »